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It's Deutsche Bank bonus week! "Hope for the best, prepare for the worst"

There was a time when Deutsche Bank would announce its bonuses in February. That changed circa 2017, when the German bank delayed its bonus announcement until early March for the indefinitely future. 

Early March is upon us, so are DB bonuses. 

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Deutsche Bank didn't comment on the precise date of its bonus announcement, but multiple sources at the bank said it will be this week. One claimed the announcement was expected Friday but was delayed. Most said Wednesday will be the day.

Expectations are not high. "Hope for the best, prepare for the worst," says one London fixed income trader. "Expectations are very low," agrees an associate in the investment bank, "It's made implicitly clear that it's a bad year and that we therefore shouldn't expect much." 

Deutsche CFO James Von Moltke said in January that Deutsche's bonuses will reflect the bank's performance for 2023. It's unfortunate, therefore, that profits in the investment bank were down 36% on '22, to their lowest level since the dark days of 2019. Deutsche is in the process of cutting €2.5bn from costs across the bank. 

As bonus revelations approach, insiders at Deutsche say the greatest gloom surrounds the investment banking division (equity capital markets, debt capital markets and M&A), which was subject to some heavy hiring under Fabrizio Campelli in 2023. Although DCM revenues rose 105% at Deutsche last year, M&A revenues were down 38%, despite all the hiring. It's M&A bankers, therefore, who are likely to be paid the least. However, many of Deutsche's recent banking hires are thought to have come on guarantees, which means they'll get paid no matter what. 

In markets, DB insiders say they're hopeful things won't be too bad. Fixed income sales and trading revenues at Deutsche fell 11% last year, but the bank said credit trading activity was "strong." The implied decline in macro trading revenues might account for all the recent departures from the DB rates team: macro bonuses may not be worth waiting around for.

If Deutsche does cut bonuses again this year, it will be the second year in a row that things have been squeezed. Last year, the bonus pool was down 8%. 

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Photo by KAL VISUALS on Unsplash

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AUTHORSarah Butcher Global Editor
  • Re
    Rebel_Leader
    6 March 2024

    Zero percent pay rises at Deutsche Bank London this year. Lots of angry employees around.

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