Morning Coffee: Deutsche Bank to make around 70 front office redundancies each day for a month. Ex-Goldman algo trader will pay you to write your novel

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Deutsche Bank has a busy month ahead. True to his promise to be a man of action rather than a man of plans and pontification, new CEO Christian Sewing wants to get on with things.

Speaking yesterday at Deutsche Bank's global financial services conference in New York, Sewing said the bank intends to make the "vast majority" of its front office job cuts by July. Sewing hasn't said exactly how many redundancies Deutsche plans to make in the front office, but the stated intention is to make 7,000 cuts in total, of which at least 5,000 are expected to come from the investment bank. With 45% of existing staff at Deutsche's corporate and investment bank working in the front office, it might be deduced that Sewing needs to clear out approximately 2,200 people in the next 32 days.

Who will they be? Sewing has already been quite clear as to his intentions (he wants to pull back from U.S. rates trading, prime broking, and corporate finance roles not connected to European and German clients), but he gave more colour (albeit euphemistically) in his presentation accompanying yesterday's talk. 

In global equities trading, where Deutsche said last week that it intends to cut headcount by 25%, Sewing said he plans, 'optimisation of [the] high-touch service model with significant headcount reduction.' In global prime finance, he plans to: 'streamline headcount in Europe.' In U.S. rates trading, Sewing wants to, "scale back activities." In equity derivatives, he wants to establish the European business as a "global hub" - which seems to bode badly for equity derivatives traders at Deutsche in New York.

Yesterday's presentation had some positives too though. Although Sewing's Deutsche Bank will, ''implement hiring freeze in functions above year-end expense target," there were intimations of recruitment elsewhere. In his presentation, Sewing said that the bank plans to, 'selectively invest' in the U.S. credit franchise. It also wants to focus on 'growth' in its electronic equities platform, particularly in EMEA. And it wants to 'emphasize core strengths in financing and treasury solutions,' while remaining totally committed to credit, FX and European rates trading.

Sewing's Deutsche is a dynamic place. Front office bankers who survive the next 32 days could have a busy time to look forward to.

Separately, if you leave Deutsche Bank and feel like writing a novel, ex-Goldman Sachs algo trader turned hedge fund manager, Jonathan de Montfort, will help you. De Montfort is offering 10 would-be authors £2k a month to write their novels. The authors, who will be subject to a rigorous selection process (beginning with a psychometric test to see if they're suited to the authorial life), will also receive advice and mentoring during the writing process. De Montfort says the traditional system for publishing a novel is dated because the author has to bear the cost and the risk.

"Imagine if Google operated that way; it said ‘Software engineers of the world, we want to build this fantastic system. We’d like you to send us in source code - just randomly. Come up with random ideas or else what you think we want; we’re not going to tell you what we want, we just assume that you know,'" De Montfort says. "And it’s like that, [publishers] say, ‘If we like what you’ve written, and we can monetise it, then we’ll pay you.’ That is an absolutely insane way to do business, in my view."


Deutsche Bank closed its Dubai equity research division. (Handelsblatt) 

Daniel Pinto, chief executive of J.P. Morgan's corporate and investment bank, points out that industry fixed income revenues fell from $150bn in 2015 to a forecast (by Coalition) $104-$105bn in 2018. (Seeking Alpha)

Pinto says second quarter markets revenues will be flat on 2017. (Reuters)

Pinto said MiFID II means the research budget has already fallen 25% and that it's likely to fall further. Meanwhile, clients are more than happy to pay for conferences where they can get everything in one place. (CNBC) 

Umberto Giacometti, co-head of private equity investment banking for HSBC, has quit for Nomura. (Financial News) 

For UniCredit and Intesa Sanpaolo , Italy’s two biggest banks, the cost to protect against default has more than doubled in the past two weeks. (WSJ) 

Only HSBC has a scale approaching the big American firms: every other European bank is smaller than even the smallest US bulge bracket bank.  Second placed BAML is slightly bigger than all the Europeans combined (bar HSBC); the disparity between the giant J.P. Morgan and Deutsche is an eyebrow-raising factor of 15. (Screaming and Shouting)

To afford an iPhone X, the average Londoner would need to work 11.3 days to earn the $1,390 required, compared to 6.7 days in New York for $1,088. (Guardian) 

CEO of Vimeo: "I remember leaving one of the interviews, and they told me that they didn't think I had the personality to be a banker." (CNN)  

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