|Bid||0.00 x 555100|
|Ask||0.00 x 230000|
|Day's range||6.36 - 6.55|
|52-week range||5.78 - 10.63|
|Beta (3Y monthly)||1.53|
|PE ratio (TTM)||N/A|
|Earnings date||30 Oct 2019|
|Forward dividend & yield||0.11 (1.73%)|
|1y target est||N/A|
(Bloomberg) -- Deutsche Bank AG executives were outraged. They had just missed out on a major deal with the Russian government and wanted answers.“We must use whatever tactic and political pressure to avoid this embarrassment,” a senior banker in London wrote in an email to the firm’s top executive in Russia. “DB not participating is a slap in our face.”The solution that Deutsche Bank allegedly came up with: permanently hiring the daughter of Dmitry Pankin, a Russian deputy finance minister. Up to that point, Pankin’s daughter Elena Arkhangelskaya had been a temporary employee.Within days of Arkhangelskaya landing a permanent position, Pankin asked Deutsche Bank to submit a proposal on a $2.2 billion bond sale. Soon after, Pankin and his daughter joined the firm’s Russia head on a vacation, going hunting, fishing and enjoying helicopter rides. Deutsche Bank, which falsely documented the trip as a legitimate business expense, scored the bond deal.Fraught RelationshipThe incident from around 2009 was revealed Thursday in a settlement with the U.S. Securities and Exchange Commission, which accused Deutsche Bank of violating anti-bribery laws. The allegations add another chapter to the Frankfurt-based bank’s fraught relationship with Russia. Its aggressive pursuit of business in the country has resulted in hundreds of millions of dollars in fines, congressional probes and seemingly endless compliance headaches.Read More: Deutsche Bank’s U.S. Unit Kept Danske’s Shady Billions FlowingIn the accord with the SEC, Deutsche Bank agreed to pay $16.2 million without admitting or denying any wrongdoing. While the SEC’s order didn’t name any individuals, three people with direct knowledge of the matter said those described in the case include Pankin and Arkhangelskaya.“Deutsche Bank provided substantial cooperation to the SEC in its inquiry and has implemented numerous remedial measures to improve the bank’s hiring practices,” bank spokesman Troy Gravitt said in an email statement.Arkhangelskaya didn’t respond to an email seeking comment.Illicit HiresDeutsche Bank is far from the first firm punished for allegedly making illegal hires overseas to win business -- JPMorgan Chase & Co. was penalized $264 million in 2016 over similar claims and Credit Suisse Group AG agreed to pay $77 million almost two years later. But Deutsche Bank is the first firm accused of such misconduct involving Russia.The country has long been a source of scandal for Deutsche Bank. In 2017, the bank paid more than $670 million to U.S. and U.K. authorities over claims that it helped rich Russians move $10 billion out of their country through so-called mirror trades -- simultaneous stock trades in separate jurisdictions that bypassed customary hoops for transferring money.And the Democrat-led House Financial Services Committee has opened a broad investigation into Deutsche Bank’s dealings with Russia and loans the bank made to President Donald Trump’s business empire.The hiring outlined in the SEC case, which also involved alleged wrongdoing in China, lasted from at least 2006 through 2014.Firm LiabilityDeutsche Bank employees created false books and records that concealed corrupt hiring practices, according to the SEC. Individuals who were offered jobs typically bypassed the bank’s highly competitive and merit-based process, which required that they have high grades in school and went through multiple rounds of interviews.One Russian hire who worked in London performed so badly that a human resources employee deemed him “a liability to the reputation of the program, if not the firm,” the SEC said. The employee, the son of a senior executive of a Russian state-owned entity, failed to show up for work and was accused of cheating on an exam.“The classic nepo situation that we have every year,” the Deutsche Bank human resources employee wrote in an email to another worker.To contact the reporters on this story: Matt Robinson in New York at email@example.com;Jake Rudnitsky in Moscow at firstname.lastname@example.orgTo contact the editors responsible for this story: Jesse Westbrook at email@example.com, Michael J. MooreFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Deutsche Bank’s HQ in Frankfurt. Employees created false records that concealed the corrupt hiring practices, the regulator found. Photograph: Kai Pfaffenbach/ReutersDeutsche Bank has agreed to pay a $16m (£13m) fine to US authorities overallegations that it hired unqualified relatives of powerful Russian and Chinese government officials to win business.The Securities and Exchange Commission (SEC) alleged that Germany’s largest lender had used false books to record the hirings, which meant the relatives – known in China as “princelings” – did not have to go through rigorous interview processes.In one case, the son of an executive from a Russian state-owned company was transferred from Moscow to London but failed to turn up to work, cheated in an exam and was described as a liability.The SEC alleged that the hiring of poorly qualified relatives was in violation of the Foreign Corrupt Practices Act. Deutsche Bank did not admit or deny the findings under the settlement.The charges centred on activities between 2006 and 2014, when the relatives were hired in the Asia–Pacific and Russia region with the primary goal of generating business for the company, such as through initial public offerings.The SEC found that Deutsche Bank employees had created false records that concealed the corrupt hiring practices and had failed to accurately document and record certain related expenses.Five examples were used to illustrate the charges, including the son of a senior Russian executive who failed to turn up to work, and was described as “a liability to the reputation of the program, if not their firm”.A London-based human resources employee is alleged to have sent a email about the son saying that: “FYI . . . the classic nepo situation that we have every year.” Two months later the HR person suggested the bank fire the son because “he failed to come to work, cheated on an exam,” the SEC alleged.In another example, the bank hired the daughter of a “deputy minister” at a Russian state-owned company as an intern in Moscow and subsequently transferred her to London. “We must do it! We should have her in London as it is NOT politically correct to have her in Moscow!” the head of the bank’s Russian office is alleged to have told his UK bosses, according to the SEC.The SEC said Deutsche Bank had taken extensive measures to fix its hiring compliance and internal accounting controls. A bank spokesman said: “Deutsche Bank provided substantial cooperation to the SEC in its inquiry and has implemented numerous remedial measures to improve the bank’s hiring practices.” The $16m settlement includes a penalty of $10.8m, interest of $2.4m and a $3m civil penalty. The settlement is less than those imposed on other banks that have been accused of similar behaviour. In 2016, JPMorgan was penalised $264m and Credit Suisse last year agreed to pay $77m.In a separate development, Deutsche Bank is to transfer 800 people to BNP Paribas as part of a deal in which the French bank will take its prime brokerage operations.Deutsche Bank said in July it had struck a preliminary agreement with BNP covering the business that serves hedge funds as part of a €7.4bn (£6.7bn) overhaul, but details on personnel and the timing of any final deal were being hammered out.The German bank has said it is eager to clinch a deal sooner rather than later to “provide continuity of service” to its clients, at a time when some have been leaving. Hedge fund clients have balances of close to $200bn with Deutsche.Most of the staff affected are based in London and New York. A successful deal with BNP will mean Deutsche will not have to pay redundancy for those individuals as it seeks to cut about 18,000 jobs globally.
FRANKFURT/PARIS, Aug 23 (Reuters) - A deal in the works for BNP Paribas to assume the prime brokerage operations of Deutsche Bank will involve the transfer of up to 800 people, a person with knowledge of the matter said on Friday. Deutsche Bank said in July it had struck a preliminary agreement with BNP covering the business that serves hedge funds as part of its 7.4 billion euro ($8.2 billion) overhaul, but details on personnel and the timing of any final deal were being hammered out. BNP and Deutsche Bank declined to comment.
FRANKFURT/PARIS (Reuters) - A deal in the works for BNP Paribas to assume the prime brokerage operations of Deutsche Bank will involve the transfer of up to 800 people, a person with knowledge of the matter said on Friday. Deutsche Bank said in July it had struck a preliminary agreement with BNP covering the business that serves hedge funds as part of its 7.4 billion euro ($8.2 billion) overhaul, but details on personnel and the timing of any final deal were being hammered out. BNP and Deutsche Bank declined to comment.
FRANKFURT/PARIS (Reuters) - A deal in the works for BNP Paribas to assume the prime brokerage operations of Deutsche Bank will involve the transfer of up to 800 people, a person with knowledge of the matter said on Friday. Deutsche Bank said in July it had struck a preliminary agreement with BNP covering the business that serves hedge funds as part of its 7.4 billion euro overhaul, but details on personnel and the timing of any final deal were being hammered out. BNP and Deutsche Bank declined to comment.
(Bloomberg) -- Deutsche Bank AG will pay $16.2 million to settle a U.S. regulator’s allegations that it hired relatives of overseas government officials to win business, making it the latest firm ensnared in a scandal that rocked Wall Street and sparked years-long investigations.The hiring, which lasted from at least 2006 through 2014 in the Asia Pacific-region and Russia, violated U.S. laws including the Foreign Corrupt Practices Act, the Securities and Exchange Commission said in a Thursday order. The Frankfurt-based bank agreed to settle the case without admitting or denying wrongdoing, the SEC said.Deutsche Bank employees created false books and records that concealed corrupt hiring practices, according to the SEC. Individuals who were offered jobs typically bypassed the bank’s highly competitive and merit-based process, which required that they have high grades in school and went through multiple rounds of interviews. One Russian hire who worked in London performed so badly that a human resources employee deemed him “a liability to the reputation of the program, if not the firm,” the SEC said.The company agreed to pay a $3 million fine and more than $13 million disgorgement and interest, an amount that the SEC said reflects its level of cooperation.“Deutsche Bank provided substantial cooperation to the SEC in its inquiry and has implemented numerous remedial measures to improve the bank’s hiring practices,” bank spokesman Troy Gravitt said in an email statement.The SEC and U.S. Justice Department in the past decade made enforcing anti-bribery laws a priority, specifically scrutinizing how financial firms had awarded internships. The industry-wide investigations were referred to as princeling probes, because they often focused on individuals with connections to the Communist party in China and prominent business people.Deutsche Bank’s SEC sanction is small when compared with other banks accused of similar misconduct. JPMorgan Chase & Co. was penalized about $264 million in November 2016, while Credit Suisse Group AG agreed to pay $77 million in July 2018. The JPMorgan and Credit Suisse cases also resolved Justice Department allegations.(Updates with Deutsche Bank’s statement in the fifth paragraph.)To contact the reporter on this story: Matt Robinson in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Jesse Westbrook at email@example.com, Gregory MottFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Deutsche Bank has agreed to pay more than $16 million to settle charges that it violated U.S. corruption laws by hiring relatives of foreign government officials in order to win or retain business, the U.S. regulator said in a statement. The Securities and Exchange Commission (SEC) alleged that Germany's largest lender hired poorly qualified or unqualified relatives of officials in Asia and Russia at their request, in violation of the Foreign Corrupt Practices Act. Between at least 2006 and 2014, it said Deutsche employed relatives of executives working at state-owned enterprises in China and Russia with the "primary goal" of generating business for the company such as initial public offerings.
AQR of the United States and Marshall Wace of Britain are among hedge funds to have taken sizeable positions over the past month to benefit from perceptions of European banks' vulnerability to recession. AQR Capital Management, a systematic fund house held a combined 6.01% across several of the six banks, while Marshall Wace, which uses both fundamental and systematic research processes, owned 4.87%.
(Bloomberg Opinion) -- “Allocate capital to the European Union – or else.”That’s how you might sum up the bloc’s Brexit strategy on the finance industry, with promises of market access being used as leverage to get U.K.-based firms to move jobs and investment out of London and onto the continent. While this attempted shakedown shows how much the Brits have to lose from Brexit, there’s a risk too of self-harm for the EU.The tough line from Brussels has, of course, created doubts about the City of London’s previously unchallenged global position. EY, a professional services provider, estimates that British finance companies so far have disclosed 1.3 billion pounds ($1.6 billion) of Brexit relocation and planning costs, allocated 2.6 billion pounds of capital for new entities abroad, planned an estimated 7,000 job moves, and expect to transfer 1 trillion pounds of assets out of the country. These are seen as costs worth paying to keep access to their EU clients.Rather awkwardly for the Brexiters who doubted that any American banker would choose the continent over London, cities such as Paris, Frankfurt and Amsterdam are proving them wrong as companies move their headquarters out of the U.K. London’s dominance is “not a God-given thing,” Philipp Hildebrand, vice-chairman of the U.S. asset manager BlackRock Inc., told Bloomberg Television last week.Still, it’s important not to get carried away with the “end of the City” stuff. Anyone waiting for a much bigger exodus, or signs that Brexit will unify and strengthen the euro zone’s financial market, will have been disappointed by the lack of progress. The European Central Bank’s supervision arm, the Single Supervisory Mechanism, warned last week that U.K.-based firms had transferred “significantly fewer” businesses, job functions and staff into their new European hubs than necessary.There has been some foot-dragging, clearly. At the end of January Bloomberg News found that the likes of JPMorgan Chase & Co. and Deutsche Bank AG were planning to relocate about 400-500 jobs apiece, just 10% of their initial estimates. More recent predictions of 7,000-10,000 staff moves for the sector as a whole barely compare with the 200,000 City departures that the London Stock Exchange’s old boss warned about back in 2016.Perhaps this is all unsurprising given the run of bad news coming out of the euro zone lately, from its economy to the performance of lenders such as Deutsche Bank. Or maybe it’s just a natural desire on the part of City firms to delay spending and upheaval until they really have no choice.You have to ask, though, whether the ever-tougher line taken by Brussels against jurisdictions outside the EU or on the brink of leaving – namely Switzerland and Britain – is merely providing an incentive to the finance industry’s many skilled lobbyists to find workarounds.It’s ironic that just as Deutsche’s shares plumb new depths, those of the London Stock Exchange Group Plc are hitting record highs, boosted in part by the successful lobbying of regulators to protect cross-border euro clearing under any Brexit scenario. Bankers have managed too to convince individual EU member states to take a softer approach than Brussels at times. Germany’s and France’s recent no-deal Brexit planning laws, for example, created a few handy carve-outs for finance.Faced with such obvious challenges to their authority, the temptation for European-wide regulators will be to double down. But this can be self-defeating.Look at how the pressure campaign against Switzerland over the terms of its access to the single market (seen as a test case for Brexit) has flopped. Retaliatory measures from Bern neutered the Brussels attempt to force EU firms to trade Swiss stocks on EU soil, and the Swiss bourse is reportedly mulling an EU acquisition as a workaround. The overall impact might just be a higher cost for the end investor.While defending the single market and its rules is laudable, the danger is that rushing to erect a regulatory moat around the continent’s financial sector will unintentionally make the market less liquid, less global and less attractive. Jonathan Faull, a former EU Commissioner, suggests that the bloc’s regulators should find ways to cooperate with the U.K. and set policy jointly. Brexit’s politics may be toxic, but technocratic heads should stay cooler.To contact the author of this story: Lionel Laurent at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Wanda Sports Group Co. -- a global sports marketing firm and event promoter -- has nabbed the interest of Wall Street bulls, suggesting it could be the next tech and media darling, and further indicating the growth in investor demand for Chinese stocks.American depository receipts in the Beijing-based company rose the most on record Wednesday, climbing 13% in New York, as several investment banks initiated the stock with buy-equivalent ratings. Deutsche Bank said the company is “well positioned for growth” in a “highly fragmented industry offering substantial organic and inorganic growth opportunities.”Wanda Sports, which owns the organizer of the Ironman triathlon race, began trading on the Nasdaq in late July. While it has lost almost half of its market value since its debut, Morgan Stanley sees the company as a “distinctive asset at [a] distressed valuation.”The fast-growing global sports industry has Morgan Stanley optimistic, and Wanda Sports’ portfolio of mass participation and spectator events worldwide “are relatively resilient amid macro uncertainties.” The firm began coverage of the stock with an overweight rating and $8 target.Wanda Sports, a unit of Chinese conglomerate Dalian Wanda Group Co., prompted Citigroup to also join the bullish wave with its buy rating. Citigroup, Deutsche Bank and Morgan Stanley led the company’s initial public offering. Loop Capital’s buy call turns a focus to China, which the firm sees as Wanda Sports’ “largest growth opportunity.”While investor reception has most recently been lukewarm, the “company’s reach into China will be an increasingly important differentiator with sports federations looking to expand global audience and participation,” said Loop Capital managing director Alan Gould.(Updates shares and chart, adds more commentary in final paragraph.)To contact the reporter on this story: Kamaron Leach in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Catherine Larkin at email@example.com, Morwenna ConiamFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Deutsche Bank, in the midst of a major restructuring and headcount reduction, is tightening its worldwide procedures for new hires, according to an internal memo. The memo, dated Wednesday and seen by Reuters, said that any new hires would require explicit approval from the bank's chief executive officer Christian Sewing, as well as his deputy Karl von Rohr and finance chief James von Moltke.
(Bloomberg) -- John Pipilis, the former head of fixed-income trading at Deutsche Bank AG, is in talks to join SoftBank Group Corp.’s giant investment fund in a senior position.Pipilis’s potential role would be head of financing at SoftBank Investment Advisers, according to two people familiar with the matter who asked not to be named because the talks are private. SBIA manages the $100 billion Vision Fund, the world’s biggest pool of technology investments, which holds stakes in WeWork, Uber Technologies Inc. and Slack Technologies Inc.The talks may not result in Pipilis being hired, the people said. Still, the discussions not only highlight how former traders from Deutsche Bank are reconvening at SoftBank, but also how the Japanese conglomerate is increasingly using financial structuring to help manage its growing tech portfolio.Pipilis, a veteran of the German lender until leaving amid its historic overhaul earlier this year, oversaw one of the world’s biggest fixed-income trading businesses, dealing in everything from derivatives tied to corporate and sovereign debt, currencies and interest rates to junk bonds and leveraged loans.Pipilis declined to comment, as did a spokesman from SoftBank.Deutsche Bank Chief Executive Officer Christian Sewing is cutting 18,000 jobs and retreating from risky trading businesses in the latest revamp of the Frankfurt-based lender, which has struggled over the years with legal and regulatory woes. The various overhauls have prompted the departures of a number of top staff.SoftBank has become home to a number of Pipilis’ former colleagues. Colin Fan, the former co-head of Deutsche Bank’s investment-banking unit, joined SoftBank in 2017, while Rajeev Misra, who built the German lender’s credit derivatives and trading business, is the Japanese company’s head of strategic finance and is in charge of the Vision Fund.Other former Deutsche Bank staff who now ply their trade at SoftBank include Akshay Naheta, Murtaza Ahmed, Munish Varma, Saleh Romeih, Faisal Rahman, Aamir Akram, and Ziyad Al Ashaikh.Unlike traditional tech investors, who buy equity stakes in startups, SoftBank has used a variety of investment strategies to fund its deals, from seeking lines of credit to using billion-dollar collar trades. Pipilis’s role may be to help the Vision Fund manage its debt, but also advise on fixed-income strategies for companies in its portfolio, one person said.\--With assistance from Sonali Basak.To contact the reporters on this story: Giles Turner in London at firstname.lastname@example.org;Donal Griffin in London at email@example.comTo contact the editors responsible for this story: Giles Turner at firstname.lastname@example.org, Keith Campbell, Marion DakersFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Online retailer Zalando is just the kind of fast-growing German business with foreign expansion plans that Deutsche Bank Chief Executive Christian Sewing needs to help drive the struggling lender's recovery. In an attempt to draw a line under years of scandals and heavy losses, Sewing is pulling back from investment banking and rebuilding Deutsche Bank's corporate division by deepening existing relationships and attracting clients beyond its traditional blue-chip customers. "Deutsche Bank is a systemically relevant bank but, nevertheless, we see a possible risk and are trying to the best of our knowledge to mitigate the risk and to have a good sleep at night," Dominika Kilka-Roth, who heads Zalando's risk management, told Reuters.
(Bloomberg) -- Want the lowdown on European markets? In your inbox before the open, every day. Sign up here.A senior official at the European Central Bank warned that banks embracing external data storage and other digital technology need to face an uncomfortable truth: there’s a good chance they’ll get hacked.“There will be accidents, especially in the cloud,” Korbinian Ibel, a director general at the ECB’s supervisory arm, said in an interview. “It’s not that clouds are more vulnerable, they’re actually often better protected than in-house systems, but they’re seen as juicy targets.”So far, Europe has been spared the kind of hack that hit Capital One Financial Corp., which said last month that data from about 100 million people in the U.S. was illegally accessed. That may change as the region’s banks face increasing pressure to reduce costs with new technology and make up for the squeeze on revenue from lower interest rates.European banks already use some services of companies like Microsoft Corp. and Amazon.com Inc. Germany’s Deutsche Bank AG eventually wants to move the majority of its applications to the cloud -- giant external data centers -- from what it has called “expensive and inflexible physical servers.” For now, European banks tend to avoid putting “highly confidential data” on public clouds, said Ibel.“We see the benefits” of cloud computing, Ibel said. “The rule is that the banker is always responsible for their data and services.”Failings can have consequences. The ECB can tell riskier lenders to hold more capital, squeezing their returns, or order potentially costly qualitative measures such as improving how users access computer systems.Banks have responded to the digital revolution by hiring tech experts, sometimes even naming them to their top management bodies. That’s good, but it doesn’t go far enough, said Ibel.“It’s not enough to have one person as the IT expert,” he said. “You need a common understanding at board level of the needs and risks of IT.”To contact the reporter on this story: Nicholas Comfort in Frankfurt at email@example.comTo contact the editors responsible for this story: Dale Crofts at firstname.lastname@example.org, Christian BaumgaertelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Some of Deutsche Bank's major investors want supervisory board chairman Paul Achleitner to step down before his term ends in 2022, a German magazine reported on Friday. Der Spiegel didn't name the investors it said were pressing for the change. Achleitner, under pressure from shareholders for some time, survived a confidence vote at May's annual shareholders' meeting.
(Bloomberg) -- Zalando SE lost money for the first five years of its existence, then in 2014 it turned a corner and began posting a profit every year. Evidence suggests meal kit startup HelloFresh SE is following a similar path.The Berlin-based food company is optimistic it can generate a group-wide operating profit this year and sustain and expand profitability in the years to come, Chief Executive Officer Dominik Richter said in an interview on Tuesday. HelloFresh shares rose the most since January in early Frankfurt trading.HelloFresh can “generate much higher profit levels than other e-commerce companies,” because the company controls the entire value chain -- from branded retail to wholesale to logistics, Richter said.The company, which assembles ingredients into boxed meal kits and seeks to convince customers of the benefits of cooking at home, earlier Tuesday reported its first quarterly operating profit, in the April-June period, after sales growth across its markets.The results are “significantly better than what we expected,” Deutsche Bank analysts Nizla Naizer and Silvia Cuneo wrote in a note to clients. They mark “a key turning point for the group in our view.”HelloFresh rose as much as 17.7%, the steepest intraday gain since Jan. 18.The Berlin-based startup is especially strong in the U.S., its biggest market, where it’s surpassed Blue Apron Holdings Inc., expanded its choice of meals, and this week started a special “date night” kit in a marketing partnership with businesswoman and actress Jessica Alba.To contact the reporter on this story: Stefan Nicola in Berlin at email@example.comTo contact the editors responsible for this story: Rebecca Penty at firstname.lastname@example.org, Nate LanxonFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Juerg Zeltner, a former UBS manager, is set to become a member of Deutsche Bank's supervisory board, two people with knowledge of the matter said on Monday. In his new role, he will represent the interests of Qatar's royal family - a top shareholder of the German lender -, the sources said. Zeltner, a former head of UBS Wealth Management, was named earlier this year as the chief executive officer of KBL European Private Bankers (KBL epb), which is controlled by the Al-Thani family of Qatar.
(Bloomberg Opinion) -- In October 2016, Henderson Chief Executive Officer Andrew Formica was busy merging his firm with Janus Capital in a bid to join the fund management industry’s $1 trillion club.“Others will say they wish they’d done it,” he said. Fast forward to his current job running the much smaller Jupiter Fund Management Plc. “Big isn’t necessarily better,” he now says.The mergers that produced Janus Henderson Group Plc and Standard Life Aberdeen Plc were supposed to usher in a wave of consolidation in the European fund management industry. That hasn’t happened – and the dismal performance of the two companies since is proving to be a deterrent to any peers thinking of expanding through acquisition.On Wednesday, SLA reported that customers pulled 15.9 billion pounds ($19.4 billion) out of its funds, more than the 13.4 billion pounds analysts had expected.While rising markets boosted performance to drive assets under management up to 577.5 billion pounds by the middle of the year, they are still 5% below their level at the end of 2017. Scale, it seems, isn’t sufficient to attract customer flows.Last week, Janus Henderson reported its seventh consecutive quarter of withdrawals. Assets under management fell to $359.8 billion by mid-year, down from $370.1 billion a year earlier.Those outflows come as performance has suffered. By the end of June, just 66% of the firm’s funds had outperformed their benchmarks in the previous year, compared with 72% on a three-year basis and 80% over five years.It seems fair to speculate that the distraction of combining two firms has taken a toll on the portfolio managers. Melding two different cultures is never easy. That may well explain the reluctance of rivals to merge.For sure, Jupiter’s Formica is cutting his cloth according to his new situation. In his current berth he oversees about $56 billion. But it’s not just the smaller asset management firms that have been put off by the less than stellar experience of Europe’s two biggest fund mergers.Asoka Woehrmann, CEO of DWS Group GmbH, was asked on an earnings conference call a few weeks ago about his firm’s ambitions to become a top 10 player in the industry. “How many mergers happened in this industry and after three years, you are sitting asking the reason why?” he replied. “This is exactly what we are going to avoid.”With about $805 billion of assets, Woehrmann acknowledged that it would take a “transformational deal” for DWS to get into the top tier, where firms need at least $1.3 trillion of assets. But he stressed the need for patience. “To be big is not our main target,” he said. “Increasing shareholder value is the most relevant target.”That certainly hasn’t been the experience of the owners of SLA stock.Mergers may still happen. Deutsche Bank AG, which owns about 80% of DWS, still seems keen to find a partner for the asset manager. UBS Group AG is similarly anxious to do a deal with its funds arm. And now that GAM Holding AG has drawn a line under its troubles, a suitor may be tempted to bid for it.But in fund management, the firm’s most valuable assets walk out of the door every evening. SLA and Janus Henderson are stark reminders of the difficulties that the industry still faces – and that mergers are no panacea.(Corrects spelling of Janus in first paragraph.)To contact the author of this story: Mark Gilbert at email@example.comTo contact the editor responsible for this story: Edward Evans at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Workspace provider WeWork has obtained commitments from at least 10 banks for US$6bn in credit facilities that remain contingent on the company's ability to push through with its planned initial public offering, sources told LPC. JP Morgan is leading the transaction, while Bank of America Merrill Lynch, Goldman Sachs, Morgan Stanley, Citigroup, Wells Fargo, Credit Suisse, Barclays, UBS, Deutsche Bank and HSBC have also been invited to the financing, according to sources.
(Bloomberg) -- Europe’s battered investment banks held their own in a quarter marked by challenging conditions, stopping a long slide in market share that has prompted painful adjustments across the continent.Even with Deutsche Bank AG slashing its trading units and HSBC Holdings Plc being thrust into turmoil, European trading desks managed to eke out a small gain over their Wall Street peers in the second quarter. U.S. firms led by Goldman Sachs Group Inc. did better in trading equities and related securities, while Europeans led by Credit Suisse Group AG and BNP Paribas SA posted stronger income from buying and selling fixed-income instruments.Here’s a look at how the biggest investment banks did in the second quarter, in four charts.Deutsche Bank led declines in overall trading as the German lender pushed through its biggest overhaul in recent memory, but HSBC was a close second. The British lender on Monday ousted Chief Executive Officer John Flint after less than two years, surprising even some executives at the London firm. Among the U.S. banks, Morgan Stanley reported the steepest declines as hedge fund clients pulled back. All told, Europe’s trading desks saw revenue drop about 7%, compared with a roughly 8% decline on Wall Street.Europe’s banks did relatively well in fixed income, currencies and commodities, known as FICC. BNP Paribas posted a 9% gain, leading a small group of European firms that bucked the broader downward trend. Banks such as Credit Suisse and Natixis SA cited strong performance in credit trading. Barclays Plc finance director Tushar Morzaria said he was optimistic on the basis of some “very large movements" across asset classes.In the U.S., fixed-income traders struggled. Morgan Stanley led a broader slump, citing the “effects of a decline in interest rates and lower volatility.” The trend was echoed by larger rivals including JPMorgan Chase & Co. and Citigroup Inc. Top Wall Street executives embraced a sports cliche to describe cautious clients that led to their worst first-half for trading in a decade: “on the sidelines.”Equities trading was one area where the U.S. stood out, with Goldman Sachs posting a 6% gain for the second-highest quarterly revenue from that business in four years. Only Credit Suisse managed to increase earnings from stock trading, despite a drop at its Asian unit.Deutsche Bank posted the biggest decline here, after announcing during the quarter that it would largely exit the equities business, a dramatic overhaul it said was reflected in its results. Natixis reported a 19% drop, another blow for the French brokerage that lost almost $300 million on Korean derivatives late last year. Morgan Stanley, Wall Street’s biggest stock brokerage, Citigroup and BNP all cited a decline in hedge-fund activity while Bank of America Corp. blamed a “weaker performance” in equity derivatives in Europe.Fees from advising clients on mergers and acquisitions or arranging their stock and bond sales didn’t offer much succor for global banks in the second quarter apart from UBS Group AG. The Zurich-based lender claimed “outperformance” as it advised on large global deals including the spinoff of contact lens maker Alcon Inc. from Novartis AG. By contrast, hometown rival Credit Suisse reported that “a number of transactions did not materialize in the quarter,” helping produce a 14% decline. Other rivals posted dips in revenue from managing debt sales.To contact the reporter on this story: Donal Griffin in London at email@example.comTo contact the editors responsible for this story: Ambereen Choudhury at firstname.lastname@example.org, Christian Baumgaertel, Keith CampbellFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Britain's opposition Labour Party on Monday called for Prime Minister Boris Johnson to investigate his finance minister Sajid Javid's role in financial misconduct during his previous career as a banker before entering politics. Labour's finance spokesman John McDonnell said he had written to Johnson to reconsider Javid's fitness for the job and should look into three areas of concern relating to the minister's 18-year finance career during which time he worked for Deutsche Bank.
Deutsche Bank has set aside over 1 billion euros (£915.72 million or $1.1 billion) to cover the cost of offloading derivatives in its 'bad bank,' or capital release unit, three sources at the bank told Reuters. Key to the restructuring is the creation of a 'bad bank' to house 288 billion euros of unwanted assets earmarked for sale or wind-down, including equity derivatives and long-dated interest rate and credit derivatives. Deutsche Bank is still assessing and gauging interest in the assets before repackaging some for sale, the sources said.