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Monday, July 15, 2024

Deutsche Bank Gears Up For Biggest Expansions In Investment Banking Space Post Credit Suisse Crumble – Deutsche Bank (NYSE:DB)

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  • Deutsche Bank AG DB is gearing up to capitalize on the growth opportunities post-collapse of its peer Credit Suisse Group AG CS.
  • The company stated its plans to hire personnel to support the expansion of its investment bank advisory team, the Financial Times reported.
  • “We are investing in advisory, which is a high-returning business. Being in M&A and ECM is key. ‘The UK is a natural market to focus on’ because it has 25 per cent of the European corporate finance fee pool,” the report quoted Fabrizio Campelli, Head of Corporate Bank and Investment Bank.
  • Last week, Credit Suisse’s head of the financial institutions’ group in Southeast Asia decided to join Deutsche Bank in the coming months.
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  • Also, in the last two months, DB hired 26 managing directors and plans to add more on top of adding around 344 employees after completing the Numis-acquisition. These moves mark one of DB’s most significant expansion initiatives since the financial crisis.
  • The company aims to expand the advisory side of the investment bank while reducing heavy reliance on high-risk, capital-intensive fixed-income sales and trading businesses.
  • Last week, during its Q1 earnings announcement, the company disclosed cutting 800 senior positions in its non-client-facing infrastructure units to save costs.
  • “We are at a multiyear cyclical deal-flow low point right now, and with the market poised to rebound in [20]24, 25 and 26, this has created a great opportunity for us to invest in and attract talent,” said Mark Fedorcik, co-head of investment banking.
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  • As per the report, Fedorcik added, with the senior hires and Numis deal, Deutsche was aiming to increase its global market share in M&A advisory back to its 2014 level of 4.5 percent from the less than 2 percent it has fallen to since.
  • Price Action: DB shares closed higher by 0.92% at $11.01 on Friday.

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