Deutsche Bank’s investment bank to shrink by 10% in third quarter, CFO says

Deutsche Bank’s investment banking unit will post revenues around 10% down on last year in the third quarter of 2021, its chief financial officer James von Moltke said.

Von Moltke told a Bank of America virtual conference on 23 September that revenues in the investment banking unit were unlikely to match a stellar third quarter of 2020. However, the 10% decline is ahead of analyst expectations, which have predicted an 18% decline over the period.

Executives at Wall Street banks have already signalled that a slow down in trading activity, which surged in the initial months of the Covid-19 pandemic, will impact overall revenues in investment banking units.

READ JPMorgan’s trading revenue to shrink by 10% in third quarter, says ex-CFO Lake

Marianne Lake, JPMorgan’s former chief financial officer who now co-heads its consumer and community banking unit, told a conference on 14 September, that the US bank’s sales and trading revenue would decline by around 10% during the third quarter and that the deal boom was showing signs of slowing. At the same event, Mark Mason, chief financial officer of Citigroup, said that he expected Q3 trading revenues to be down low to mid-teens on the previous year.

Deutsche’s investment banking head, Mark Fedorcik, told a conference last week that trading revenue had picked up in late August and September after a sluggish activity earlier in the quarter. The German lender’s fixed income trading unit typically accounts for around 75% of revenues within its investment bank.

Von Molkte added that Deutsche will book an extra €700m in costs for technology investments, redundancies and shrinking its office space.

To contact the author of this story with feedback or news, email Paul Clarke

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