Deutsche Bank to shrink rates trading team and review global equities business

Deutsche Bank’s plans will involve a significant reduction in headcount across the US and Asia.

Deutsche Bank has stated it will scale back its US rates trading and sales capabilities and conduct a review of its global equities business, the latest restructuring move for the investment bank.

The German bank has come under intense scrutiny to reduce costs across its investment bank, with planned cuts expected following the dismissal of its chief executive John Cryan this month.

The sweeping cuts were announced alongside the release of its first quarter earnings, in which no business line in its investment bank achieved an increase in revenues over the year.

In response, Deutsche Bank will shrink its US rates sales and rates trading activities, with a focus on reducing its balance sheet, leverage exposure, and repo financing, and instead commit to its core European business.

It will also undertake a review of its global equities business, “with the expectation of reducing the platform,” it stated.

This will include: “reducing leverage exposure to global prime finance where the focus will be on maintaining our deepest client relationships by reprioritising the deployment of resources.

Revenues from sales and trading and fixed income, currencies and commodities (FICC) businesses declined 16% during the first quarter, of which equities sales and trading revenues declined 21%.

Deutsche Bank’s plans will significantly reduce its headcount across the US and Asia. “These reductions are painful but regrettably unavoidable to ensure our bank’s competitiveness in the long-run,” said Marcus Schenk, Deutsche Bank’s newly appointed CEO.

In February last year, it announced plans to reduce its equities and fixed income staff globally by 17%, and 6% respectively. In March, it was reported its head of macro trading, Sam Wisnia, has left to join Eisler Capital, a $2.6 billion macro hedge fund.

However, in December last year it appointed Peter Selman, Goldman Sachs’ former co-head of global equities trading and execution services, as its new global head of equities in New York.