Deutsche Bank will be making redundancies. When Anshu Jain and Juergen Fitschen unveiled Deutsche's new strategy in April, they spoke of €3.5bn of cost cuts. At the time, no one entirely knew what this might mean for jobs at Deutsche's corporate and investment bank. No one still knows what this might mean for jobs at the CIB, but as of today they're a tiny bit clearer.
"We promised we would provide more information on our strategy soon," said Anshu Jain at Deutsche Bank's Global Financial Services Conference in New York, before adding, "Today is not that day." Nonetheless, Jain did offer some elucidation on Deutsche's coming cuts. This is what you need to know now.
1. The layoffs will start in August 2015
Jain gave a timescale. This is below. Today, the bank is midway through the 90 day 'strategy detailing phase'. In 45 days' time, it will explain precisely what's going on. After that, the cuts will come.
2. Entire business lines will be exited
Deutsche Bank has been through a period of existential self-examination unmatched by other banks in recent history, said Jain. In the process, it's reached the conclusion that it still wants to be a universal bank and it still wants to be global. But it wants to be a, "more focused global universal bank." It will drop some of the "optionality." Entire business lines will be "shuttered." There will be some "truncating [of] client relationships."
3. Compliance staff will be safe. So will equities staff. ECM staff will be hired, especially in North America
You'll be fine if you work in compliance for Deutsche Bank: spending on regulation and control will have increased €1.3bn in the three years come the end of 2015. Equities sales and trading staff also look good: equities is a consistently high return on equity business, said Jain. Even so, Deutsche does not intend to build out its equities sales and trading business further in future - it wants to focus on expanding its equity capital markets (ECM) business instead; especially in the US.
4. Other banks have been bluffing on FICC. Deutsche has been vindicated
Just because a bank [UBS] says it's exiting a fixed income business area, that doesn't mean it will do so. "A number of our peers have talked about stepping away, but we still see them making markets on a daily basis," complained Jain. "Not all those who claim to have left have left."
It's a very good thing Deutsche didn't pull out of fixed income currencies and commodities trading when everyone suggested doing so, added Anshu: "The recovery has demonstrated that it would have been folly for us to have done that."
5. Beware shared services. Don't expect a pay rise
"On cost, we get it," said Jain. Pre-existing cost cuts have been insufficiently, "stringent," he added. In future, incremental costs are to be carefully curtailed.
Deutsche is 'redesigning its operating model.' "The process we use to deliver our day-to-day service is now on the table," said Jain. Shared services are sitting on a plate in the middle, waiting to be carved as appropriate.