Credit Suisse & Deutsche Bank to fight for the same bankers next year

Nearly one week on from Deutsche Bank's investor day, Credit Suisse is now going through the same process. The Swiss bank has already released some investor presentations, with more detail due in the investment bank-specific presentation later on. Some things, however, are already clear.

Firstly, the era of shrinking the investment bank (which at Credit Suisse now includes the markets division) is over. In his presentation today, CEO Thomas Gottstein will say that Credit Suisse's investment bank is moving back to, "sustainable, profitable growth" after a period of "restructuring and de-risking." 

In this new growth phase, Gottstein will say too that Credit Suisse will be 'proactively investing in growth.'

It won't be the only one. Deutsche Bank is also all about growth these days. Last week, the German bank announced its intention of achieving 7% compound annual growth in its corporate and investment bank between 2019 and 2022. Among other things, DB said it would make debt capital markets and Environmental Social and Governance (ESG) clients a priority, and that it will be 'expanding further' into "sectors such as healthcare, industrials, consumer and technology media and telecom," where it sees "strategic opportunities."

It's probably not surprising that having peered into its own crystal ball, Credit Suisse has spied growth opportunities in similar places. Gottstein's presentation today talks about an "M&A recovery" that will necessitate expansion. - And like Deutsche, Credit Suisse wants to expand in technology, healthcare and ESG. 

It's not the only overlap. Credit Suisse also wants to build on its "proprietary cross-asset electronic execution capabilities;" Deutsche Bank is all about strengthening Autobahn. Credit Suisse wants to grow private credit financing (despite the exit of Jim Amine, who was running the private credit opportunities fund, in March) ; Deutsche Bank moved into private credit with a flourish in 2019. Like Deutsche, Credit Suisse will need some excellent technology talent to help with its aspiration of 'standardizing core platforms,' 'building-out data analytics, cloud and cybersecurity,' and, 'driving digitalization and automation.'

Some of Credit Suisse's aspirations are more niche. - As usual, the Swiss bank wants to increase ultra-high net worth clients' use of its investment banking products. It also wants to grow its share of sponsor M&A.  

The two banks diverge in their return on equity targets. By 2022, Deutsche Bank expects the return on equity in its investment bank to be down to 9.5% to 10.5% (from 11% currently). Credit Suisse is aiming for a return on regulatory capital of 10-15% in the "medium term" (up from 11% right now). The implication is that Credit Suisse might be a bit more wary around capital heavy business areas in fixed income sales and trading.

What's clear from both banks' presentations is that 2021 might actually be a year of renewed hiring for investment banks. If you're a data specialist, or a healthcare or TMT banker especially, now might be the time to dust down your résumé. Next year could be a stampede.

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