Deutsche Bank's bonuses are out and there are some seriously disappointed people

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This was supposed to be the year that Deutsche Bank made up for its non-existent performance bonuses in 2017.  However, today is the day that the German bank announced its pay, and a small sample suggests people there are not happy.

"On a satisfaction scale of 1-10, I would say I'm a one, if not a zero," says one VP level fixed income trader. "I'm into negative numbers," says a fixed income trading associate. "I'm quite disappointed," agrees a VP level equity derivatives trader. "I'm maybe a five - average but not good. It's not above my expectations, but nor is it zero either." A tech analyst says he's a "three." A senior risk professional declares himself, "below one," and says he's had the lowest bonus for ten years.

The disappointment follows a miserable performance in both Deutsche Bank's fixed income currencies and commodities (FICC) and equities businesses in 2017. When financing revenues were added into Deutsche's FICC results (to make them more comparable with peers), analysts at KBW said DB's FICC revenues fell nearly 50% year-on-year in the fourth quarter.  Equities revenues at the bank were down 25% over the same period.

Alongside these poor results, Deutsche appears to have mismanaged expectations. The bank indicated several times that this year's bonuses would be back to normal.  One equities salesperson who describes himself as a "one", says the new head of equities Peter Selman indicated that they would be compensated for the previous two years of low payouts. "The general feeling is we have been lied to. The franchise was damaged to start with. This is the coup de grace," he says.

Fixed income traders say they were at least expecting to be paid up to compensate for the loss of their bonuses last year. "I've been paid line with the market," one complains. However, a senior structurer says, "the mood on the floor is good" and a more junior credit trader says the feeling is "positive."

Any disappointment in DB's markets division appears to have been compounded by the bank's failure to hike salaries (after John Cryan suggested this would happen back in January). "They didn't really increase the base pay by much and people are getting slightly frustrated," complains one trader. "Every year they tell us the same thing - that we'll get promoted and it will help our total compensation, but it never happens."

If Deutsche's traders are complaining, the investment bankers we spoke seemed considerably more cheerful. "It's better than expected - things are back to normal," says one VP in M&A, adding that he's a "nine, or maybe actually and eight." A VP in DCM said he's, "a ten." "I'm a seven," said another analyst. "And that's in line with most corporate finance juniors."

Deutsche recently made a round of senior-level redundancies in its M&A business.  By ditching managing directors and directors it may have freed-up some money to pay its bankers lower down the hierarchy.

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