Credit Suisse bankers and traders might feel a little envious this morning. While Credit Suisse embarks on yet another restructuring and cost-cutting program with seemingly inevitable implications for bonuses, Deutsche Bank seems to be lining up another year of strong pay.
Deutsche Bank's second quarter results show that it increased spending on compensation and benefits in the investment bank 11% year-on-year in the second quarter and 13% year-on-year in the first half as a whole. Headcount in the investment bank was stable in the first half, as was front office headcount specifically, meaning that the average employee is on track for a raise, albeit one that's only in-line with inflation.
The bank said today that cash bonuses are up €50m this year. Bonus beneficence is most likely to be directed towards Deutsche's macro traders and M&A bankers. The bank said today that revenues across rates and FX were "significantly higher" in Q2, that emerging markets revenues "more than doubled" and that M&A revenues were up 50% year-on-year. Fixed income sales and trading revenues were at their highest level for a decade.
While macro traders and M&A bankers are on track to be well remunerated at Deutsche Bank, debt capital markets bankers are not. DCM revenues fell 95% year-on-year in Q2 as a result of "materially lower leveraged debt capital markets revenues." There were also €150m of markdowns on leveraged loans held on Deutsche's balance sheet. This follows $245m of leveraged loan writedowns at Credit Suisse. Watch this space.
Last year, Deutsche Bank increased its bonus pool by 1%. The average material risk-taker at the bank was paid € 1,454,509.
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