When Deutsche Bank CEO Christian Sewing announced his new strategy for the bank in July 2018, the headline number was his intention to make 18,000 job cuts across the bank as a whole over the next three years. Earlier this month, Sewing said half those cuts would be coming from Germany. Today's results suggest over 3,800 people who formerly worked in the investment bank are already no longer employed by DB.
Deutsche's declining headcount is obfuscated by the bank's new reporting lines. This time last year, Deutsche reported headcount numbers for a combined corporate and investment bank (CIB). 12 months on, that CIB has been split into three different units: a corporate bank, an investment bank, and a new capital release unit which includes all the equities trading books and businesses being run down.
You can see what's happened to overall and front-office headcount at the newly separate units in the tables below. These show year-on-year equivalent headcount per unit in the third quarter. Basically, you really didn't want to work for any of the business areas (equities, some rates) that were moved into the CRU.
However, as the chart for front office headcount for the units shows, Deutsche has been hiring front office people for both its investment bank and its corporate bank. This likely reflected the addition of graduate hires in the third quarter, but still.
Now that Deutsche breaks out the different components of its corporate and investment bank, it's possible to see how much staff in each area are paid. On a per head basis, compensation in the investment bank is highest, at €91k per person in the first nine months of 2019, down from €98k in the same period of last year in the same business units. Pay in the capital release unit (CRU) is even less, at an average of just €60k per person in the first nine months of this year. And pay in the corporate bank is lowest of all at €56k.
Pay per head in the CRU and in the corporate bank was up on last year. Unfortunately, Deutsche doesn't have a lot of spare money to pay people in the investment bank. Despite all the headcount cuts, profits in the investment bank were down 73% in the third quarter and the return on equity in the unit fell to just 0.2%. The cause of the decline isn't entirely clear - restructuring might be blamed, but Deutsche also mentioned 'risk management' (ie. trading) losses in its fixed income business in the third quarter. Overall, the bank said it was 'encouraged by progress in restructuring efforts and restored momentum in the businesses so far.'
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