It has been quite a decade for Deutsche Bank. Back in 2016, it seemed as if it wasn’t for bad luck, the German national champion wouldn’t have any luck at all. Every day seemed to bring a new trading loss or regulatory problem, and the slow bleeding of personnel, profits and capital seemed impossible to stop. But today, with a share price that’s quadrupled from the lows and several years of consistent market share gains, Christian Sewing’s Deutsche is hardly recognisable from the basket case of the first Trump presidency.
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One aspect of this recovery is that Deutsche is gradually getting back into some business lines which it had previously exited, like commodity trading. They have recently hired former Goldman Sachs traders Madhav Janakiraman and Benoit Bosc, along with two Morgan Stanley salespeople, to build an energy desk. This is the first significant franchise to report to Kow Attah-Mensah, the head of commodities who was hired after leaving Morgan Stanley but it’s unlikely to be the last.
It has to be remembered that Deutsche’s pattern of business units today is a consequence of necessity as much as strategy. It left commodities trading in 2013, not because it didn’t like the business, but because it needed to do things to save capital. The big strategic cuts which Christian Sewing made at the start of his term as CEO weren’t driven by any intrinsic hostility to the investment banking industry; they reflected the need to concentrate on things where Deutsche had a realistic near term prospect of making an acceptable return.
Now that capital isn’t quite so scarce, it’s no surprise that Deutsche is getting a little bit more interested in some of these franchises again. Over the last five years, it’s built up a metals trading business (under the forex division; the new commodities desk is part of the rates business), which is now in a position where it has generated $100m of revenue in the first half of 2026, and is generally regarded as a globally credible player.
Which holds out the tantalising question – could Deutsche Bank get back into equities trading one day? This was the biggest shock out of all the cuts that Christian Sewing made. Equities trading has been a great business to be in so far this year, but it’s very cyclical and it is not cheap, in terms of salaries, technology or capital requirements. It’s an industry where you only reap rewards if you are really serious about gaining a top five position, and if you have enough commitment and financial strength to bear all the pain of the bad years in order to get to the good ones.
So it will probably be the last big investment banking line where Deutsche Bank makes a return, but it’s certainly not impossible. Anyone working for a bulge bracket bank, who feels like they might want a new challenge in another decade’s time should keep an eye on Frankfurt.
Elsewhere, we all know that legal and professional services are downstream of the M&A franchise, and that consequently, they tend to experience the swings and fluctuations in investment banking markets in an exaggerated way. In the current conditions, law firms are desperate to recruit top talent, and so they have hit upon the solution of tying up elite students in their first year of law school.
This is, if anything, even crazier than the widely mocked private equity “on cycle recruiting”, the practice of recruiting first year analysts on investment bank training programs. Some of the people being asked to commit to a future start in a high-pressure, $235,000 job apparently “have not even had a first semester of grades”.
And there is no Jamie Dimon figure to put a stop to the practice, as the JPMorgan CEO finally did with private equity. Law schools, the American Bar Association and even some big law firms themselves are all saying that it’s a bad practice that should stop. But while there is a perceived advantage in recruiting the very most elite students, and while firms are able to persuade themselves that they can identify these geniuses on the basis of a short interview, the temptation to push recruiting earlier will always be there.
Meanwhile…
Morgan Stanley have hired Tim Luke from Barclays. Luke is one of the British bank’s real veterans, having been acquired with the Lehman Brothers franchise in 2008, served as an advisor to past governments and led the ARM Holdings IPO in 2023. He will be a vice-chairman in the MS technology investment banking group. (Bloomberg)
Alex Gerko of XTX Markets has a family office called “Cromulon” (named after a cartoon) which manages about $500m of his estimated $17bn fortune. (Financial News)
“As people who have skin in the game, we speak the same language as our clients”. Ashok Varadhan of Goldman Sachs isn’t kidding when he says this. Despite having made significant losses in the first quarter of the year, Goldman’s rates trading desk maintained its confidence, capital and risk appetite and came back in Q2 to deliver the best first half performance for 15 years. (IFR)
Nicole Su has gone from JP Morgan to be head of emerging AI technology banking for UBS. (Financial News)
More and more companies are using AI tools to check up on employees as they work from home. But employees are crafty, and have worked out how the systems can be fooled. The secret is to aim for 80% activity rather than something suspiciously high, and don’t give yourself away by making inconsistent calendar entries. (WSJ)
What do you actually do with the time, if you’re in the lucky position of being poached from one hedge fund to another and needing to serve out a year long non-compete? Some people make wine, some go to tennis camps or travel to Antarctica, but the most common answer is apparently to just spend more time with family. (Financial News)
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