Deutsche Bank suggests European bankers might get higher bonuses this year
If you work for a European bank and are anxious about the upcoming bonus round, Deutsche Bank has your back.
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Deutsche Bank’s European Banks outlook report, published today, strikes an optimistic note – across the board.
Written by Benjamin Goy, the report is infectiously optimistic. Goy and his team expect fixed income, currencies, and commodities salespeople & traders to finish the year strongly. They expect equities salespeople & traders to continue their year-long successes. Goy even expects investment banking to finish the year on a high, driven by an extremely strong debt capital markets performance and M&A hopes that just need “more political clarity”.
It’s a contrast to what the Boston Consulting Group (BCG) had to say about European banks' bonuses a week ago. BCG predicted that “universal banks”, such as the major European banks, would lose market share to the Bulge Bracket, the biggest five American banks.
European banks with substantial investment banking operations look like doing particularly well this year. As the char below shows, these include Barclays, UBS, and BNP Paribas (and Deutsche Bank itself, although it did not include itself in the report).
Deutsche Bank’s CFO, James von Moltke, seemed to confirm the merit of his employer’s optimism a few weeks ago, saying that Deutsche’s investment bank “continues to perform quite well” in both fixed income and origination and advisory (Deutsche doesn’t have an equities business).
The strong year suggests that Deutsche Bank's decision to stack up on managing directors in the last 18 months or so was a good thing. Although the hiring means that the bank’s efficiency is suffering in the short term, it will pay off if the bank’s predictions are correct.
How do you feel about the upcoming bonus round? We’re currently preparing our bonus expectations survey to clock industry sentiment. You can fill it out yourself here.
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