Morning Coffee: Deutsche Bank focuses on wellness, Credit Suisse ponders possibilities. Worst ever co-investment scheme?

If you're a fixed income trader faced with a choice between Credit Suisse or Deutsche Bank nowadays, it's reasonably clear which one you will choose. - You'll choose the bank saying it's in a “growth phase,” that it's gaining market share, that it can afford "to hire in an environment in which people have become more expensive,” and that it will both, "continue to pay competitively for our talent and do what it takes to attract people.”

That bank is Deutsche Bank. Or at least, it's Fabrizio Campelli, head of Deutsche's corporate and investment bank, who spoke to Financial News from the DB offices on 1 London Wall while he waits to move into the new DB office in which there will be an entire floor devoted to 'wellness' and meditation in the style of Goldman Sachs. Deutsche Bank can afford to lavish pay and perks on its staff suggests Campelli: it's spent years improving its technology and back office and now has the "capacity" to focus on its people. 

Some of those people are coming from Credit Suisse. As we reported last week, Paul Bajer, head of credit structuring at Credit Suisse is joining Deutsche; Bloomberg says he'll be head of a new cross asset platform with Vadim Totskyy. Brian Connors, who co-headed investment grade trading at Credit Suisse is rumoured to be off to DB too. 

Deutsche Bank's touchy-feely high paying renaissance comes as Credit Suisse is said to be in the early stages of contemplating raising some new capital. Reuters reports that the Swiss bank, which raised CHF1.75bn from investors only a year ago, has its eye on in excess of another CHF1bn. Credit Suisse strenuously denies this, however, saying it's "robustly capitalised" and "currently not considering" anything of the sort.  

Despite Credit Suisse's protestations, the bank might benefit from a little something extra. In a research note issued after Credit Suisse's new strategy was announced last year, UBS noted that capital is being withdrawn from Credit Suisse's investment bank this year (US$13bn in Q3 2021 to US$11bn in 2022), but is due to rise again to US$13-13.5bn in 2024. This withdrawal seems to be coinciding with the exodus of Credit Suisse's credit trading talent, which was ultimately supposed to drive returns. It might help if capital hadn't been withdrawn from the investment bank in the first place, although it could be too late for that now....

Separately, any ex-Deutsche Bank people who joined SoftBank's Vision Fund in 2019 and partook of the $20bn of loans that were on offer to them to coinvest in the funds (between $25m and $50m each) might be feeling a little impoverished. 

Bloomberg reported yesterday that SoftBank's senior people have received pay cuts of up to 40% following a $27bn loss in the Vision Fund. Pay for Rajeev Misra, the cigarette-smoking barefoot ex-DB head of the Vision Fund isn't disclosed after he was booted from the board, which is a shame as Misra could probably do with some extra money if he took out one of those loans three years ago.

Meanwhile...

Brevan Howard has also been hiring from Credit Suisse. Basil Eggenschwyler, who was the head of credit trading in EMEA for Credit Suisse is one of the people marshalling an extra $1bn in credit investments there. (Bloomberg) 

JPMorgan's Paris employees went from 78 to 379 over the course of 2021. At the end of 2021, there were 1,287 employees at JPMorgan SE, which houses European employees, up from 626 a year earlier. (Financial News)

It's a terrible time to be working on IPOs in London. The British market is on track for its worst first half since 2009. (Bloomberg) 

Bank of America strategist Kamal Sharma thinks the pound is in trouble and that rate rises won't fix it. The current account deficit, the deteriorating relationship with the European Union over Northern Ireland and questions around the central bank’s credibility are a “perfect storm.” (Bloomberg) 

The Financial Times has renamed its How to Spend It magazine HTSI. 'By leading with the HTSI acronym the magazine will allow readers freedom to interpret the "S" in line with their own deeper interests, whether that be how to style it, how to save it, or how to steer, surf or savour it.' (Financial Times) 

Other potential reader interpretations – such how to splurge it, how to snort it, or how to steal it – did not make the press release announcing the changes'  (Guardian) 

Law firms are the latest to discover a need for hiring data scientists. DLA Piper, for example, has developed an in-house litigation analyzer, powered by artificial intelligence, that looks at data sets of litigation history to try to predict how a particular claim might unfold. (Wall Street Journal) 

Acute stress reduces your resilience to COVID. (Nature) 

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