As Deutsche Bank gears up to restructure its Asian equities business, axed employees in Hong Kong will face a tough time finding similar work in a job market that is already awash with candidates. Deutsche is reportedly cutting onshore sales and derivatives coverage in individual Asia Pacific markets, a move that will involve unspecified redundancies as part of new CEO Christian Sewing’s plans to trim 7,000 jobs globally.
“For the top 5% to 10% of Deutsche equities people – by quality, not seniority – there will always be jobs at other banks. And if you’re a Chinese national at associate-3 or VP-1 level, you’ll also get an offer,” says a source with knowledge of Deutsche in Hong Kong. “The rest will seriously struggle.”
It doesn’t help that Deutsche’s expected equities cuts follow three years of heavy trimming by other banks. Credit Suisse culled dozens from its Asian equities operations last year after a slump in revenues. Barclays, BNP Paribas, CLSA, Nomura, CIMB and Jefferies have also cut jobs, while Standard Chartered shuttered its entire Asian equities unit in 2015.
The Hong Kong job market for equities roles within banks “remains muted”, says former Deutsche banker Benjamin Quinlan, now a finance-sector consultant. “There are a number of dynamics weighing on equities businesses globally – including MiFID II, margin pressure in response to the shift to electronic trading, and regulatory and operational pressures felt by buy-side clients – which are impacting Asia,” he adds.
Onshore sales jobs, which Deutsche’s new cuts are targeting, are particularly hard to find at other global banks in Asia. “Onshore sales coverage at Deutsche in Asia will be scaled back because it’s now focusing its efforts on servicing its core European and German client base,” says Quinlan. “Moreover, the heterogeneous nature of the Asian market makes any bank’s onshore coverage relatively costly.”
Deutsche’s Asian equities revamp isn’t just about job cuts. The German firm wants to concentrate on larger clients and its electronic equities business, according to an internal memo seen by Bloomberg. “Good luck with that – it just means the bank is biding its time,” says the Hong Kong-based source. “Deutsche isn’t best in class in Asian equities. There’s still no way it can get its cost structure in line. It’s a dead man walking.”
Ex-Deutsche banker Quinlan says the firm’s focus on large clients is the same strategy “as pretty much every bank in Asia”, because these accounts are typically the most profitable. “And its focus on electronic equities is a natural response to industry trading flow continually migrating from high to low-touch platforms.
What lies in store for the likely majority of Deutsche's Asian equities staff who won’t find similar work at other banks? “At the more senior levels, many of them may move into prime brokerage or a hedge fund,” says Gary Lai, a managing director at recruiters Charterhouse Partnership. “The juniors could consider jobs in electronic-trading or financial-software companies.”
“There might also be roles within product teams at private banks, many of which are still growing in Asia,” adds Quinlan. “And some will realise the banking sector is shrinking and will take the opportunity to do something different, including exploring options in fintech.”
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