Morning Coffee: Another bank has cut its more expensive people. Chris Rokos can buy another English mansion
As we roll towards the allocation and payment of end of year bonuses, another bank has been cutting the sorts of people who might usually expect big ones. This time, it's Deutsche Bank.
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The Financial Times reports that Claudio de Sanctis, the head of Deutsche's private wealth and retail unit, has cut 111 people, most of whom are directors and managing directors. Deutsche's private wealth and retail division has a cost target of 60-65% next year. In the first three quarters of this year, it was 77%.
While Deutsche Bank has been cutting in its private bank, it appears to have slowed the process in its investment bank: spending on restructuring and severance in the investment bank fell to €18m in the third quarter, from €27m last year. However, senior bankers at Deutsche appear to generate abnormally low revenues per head, so the hatchet may yet appear again.
De Sanctis has not only been cutting, but cutting to grow and cutting to hire. He told the FT that if he's going to reach the 60-65% target, there will need to be growth in «all our business lines.» He also told the FT that he will surely need to start hiring some new wealth managers next year.
If de Sanctis' cutting-growing-hiring strategy fails, he may be chopped too: the FT notes that his two predecessors were replaced for failing to deliver growth and productivity targets.
Deutsche Bank isn't the only one trimming senior people: HSBC has a similar approach; Barclays may soon be open to trying it. Citi appears to have cut Penny Lovell, head of its high net worth business in London, and was recently seen hiring junior debt capital markets (DCM) bankers after letting go of senior people.
Separately, Chris
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