Josef Ackermann, chief executive of Deutsche Bank, last month bowed to internal pressure and appointed Michael Cohrs and Anshu Jain as the first co-heads of corporate and investment banking. Jain, previously head of the debt division, became head of sales and trading, covering equities and fixed income.
Kian Abouhossein, banks analyst at JP Morgan, said in a report that by combining sales and trading in equities and fixed income and putting together the departments' research teams, Deutsche could cut costs by €100m. A further €400m could be saved in the back office. He said the German bank could reduce sales and trading staff by 145, a 10% reduction, and research by 38, a 4% fall.
JP Morgan estimates that Deutsche employs 550 staff in cash equity sales and 900 in fixed income, with 700 in equity research and 250 in fixed-income research. Abouhossein said: "A material part of the restructuring burden will fall on equity sales and trading, which we estimate generates half the revenues of global markets, the debt division, but operates with similar staff levels."
JP Morgan estimated that Deutsche earned revenues of €1.3m a head in equity sales and trading, compared with €2.1m in fixed-income sales and trading. Merging the two would allow smaller accounts to be allocated to fewer sales people as the top 7% of revenue-generating clients represent 64% of Deutsche's total sales, it said.
JP Morgan said: "We estimated about half of unallocated staff are based outside Germany; hence it is possible to reduce unallocated staff."
A senior source at Deutsche said the bank would be aggressive in cutting costs, but added that it was too early to specify numbers.