Deutsche Bank's big hiring in a bad quarter now on display
Deutsche Bank’s first quarter results for 2023 are out and it was… A mixed bag.
The investment bank didn’t do very well. Revenue fell to €2.7bn from €3.3bn in the first quarter last year, but the investment bank's increased headcount massively – from 17,071 to 19,118 in a single quarter.
It paid slightly more in compensation than last year – €612m vs €611m – but that pot was spread across the extra 2,000 people. The numbers suggest that the average Deutsche Banker in q1 was paid nearly €4k less than the same quarter last year (from €35.8k per head to €32k per head, an 11% decrease).
DB itself said that it is “also focused on right-sizing our non-client facing functions,” and that in the second quarter it intended to reduce “senior non-client facing workforce by 5%,” as well as introduce some degree of freeze on new hiring.
FIC trading still made up the overwhelming majority of Deutsche’s IB revenue (some 88% in Q1 2023, up from 85% in Q1 2022), so a decline in volatility (which, admittedly, is usually good for the world at large) has an outsize impact on the investment bank’s bottom line.
The FIC revenue decline could be a case of poor motivation – after a pretty successful 2022, Deutsche Bank revealed a pretty stagnant bonus pool. The bank itself pointed the finger at “a significant contribution from episodic items in the prior year quarter which did not recur.”
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