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Deutsche Bank is on an aggressive hiring spree, adding more than 100 investment bankers over the past 18 months to begin boosting revenue and reduce its reliance on bond trading.
Since the start of 2023, Germany’s biggest lender has hired 125 investment bankers, including from Credit Suisse, with 75 joining at CEO or director level. Deutsche’s purchase of British broker Numis, completed in October, brought in an additional 300 employees.
The decision to expand the ranks of its investment bankers marks a turnaround in Deutsche’s strategy since the financial crisis, a period during which the bank largely scaled back its business to cut costs and expanded other lender parts.
It also comes amid a growing recovery in global mergers and acquisitions after a long drought. Deutsche was seventh in the league table for investment banking fees in the first quarter, up from 11th for the full year 2023 and ninth in 2022, according to data provider Dealogic.
Fabrizio Campelli, head of Deutsche’s corporate and investment bank, told the Financial Times the lender aimed to offset its volatile and capital-intensive fixed-income trading by expanding its corporate finance advisory arm.
In addition to work on acquisitions, the firm advises companies on raising new debt and equity capital, as well as initial public offerings.
“We’re not looking to get back into the top five banks globally, across all the companies with bulging groups – it’s more about strategically picking our spots and winning in them,” he said.
Campelli said its extensive hiring has increased the number of “revenue-generating bankers” in its corporate finance advisory business by up to 25 percent. He hopes the recruitment will lead to a similar increase in the investment bank’s advisory revenue over time.
“Over time, we expect to see a corresponding increase in performance compared to pre-2023 levels,” he added.
While the investment bank’s performance has improved in recent years, the rise has depended on its bond trading. As a powerhouse for Deutsche, it accounted for more than 80 percent of the investment bank’s sales last year.
In 2023, corporate finance and M&A bankers generated €1.25 billion in revenue. While sales were up 26 percent from 2022 levels, they still accounted for less than 5 percent of Deutsche’s total revenue in 2023.
Campelli, who has led Deutsche’s investment bank since 2021, said the investment in employees is already paying off. Revenues in the corporate finance advisory segment rose 54 percent in the first quarter compared to the same period a year earlier.
Key hires at the bank over the past 18 months include Alison Harding-Jones, who moved from Citigroup as global head of M&A; former Lazard banker Ken Oliver Fritz, who is now Emea’s vice president of creation and advisory; and William Mansfield, who heads M&A for Emea and was previously at Credit Suisse.
The hires are part of a broader ambition Deutsche set out last year to diversify the investment bank’s revenue beyond bond trading.
Despite the investment bank shedding 3 to 4 percent of its bottom performers each year, the business now has 4,800 front office staff, up from a low of 4,200 as a result of a 2020 restructuring by CEO Christian Sewing.
“We’ve attracted talent from companies that we couldn’t have attracted five years ago, partly because the market was too tight and partly because the DB brand wasn’t where it is now six years ago,” said Mark Fedorcik, co-CEO. of investment banking at Deutsche.
“They want to come here now. They’ve seen the stock double over the last five years.”
The bank has also drafted in senior dealmakers to advise financial institutions, consumer and financial groups, technology companies and healthcare businesses. In addition, it has hired leaders for its Asia Pacific and Latin American businesses, as well as in equity capital markets.
Fedorcik defended Deutsche’s £410m acquisition of Numis after the bank paid a 72% premium for the broker’s UK expansion. In February, Deutsche booked a €233 million write-down on the business.
While some employees have left Numis since the takeover, Fedorcik said it has gained more clients than it has lost, with the likes of Coca-Cola Europacific, Land Securities Group and Airtel Africa joining them.
“The UK market’s fees over the last three or four months have been mixed,” Fedorcik said. “However, this is a strategic acquisition focused on the long term over the next two to three years, not the first few months.”