The Deutsche Bank Exodus Ain’t Over Yet

The 2016 (non) bonus season might be over, but managing directors are still saying auf wiedersehen.
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In mid-2015, Deutsche Bank was feeling its oats. Eager for talent, the bank poached Blake Hallinan away from Bank of America Merrill Lynch, where he’d spent more than 15 years, to become the bank’s new head of global retail investment banking coverage. The hire was part of a concerted push by Deutsche Bank to corner the retail investment banking space. Then-head of Deutsche’s Wall Street operations Paul Stefanick said the appointment lent “exciting momentum to our growing franchise.”

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Now that momentum has reversed. Hallinan is out, two sources told Dealbreaker, back to his native BAML after two short years at its German rival. In ditching Deutsche for greener pastures, he joins other retail-focused bankers who have bailed in the past year, including fellow BAML native Joe McIntosh – hired in mid-2013 – and Deutsche veteran Keith Wargo. Stefanick left at the end of June for Evercore.

Though many of Deutsche Bank’s 2017 departures occurred earlier in the year – during a bonus season that was anything but and a round of layoffs that did for morale what the Justice Department did for profits – high-level attrition hasn’t abated in recent months. In addition to Hallinan, sources told Dealbreaker, at least three other managing directors have quietly taken their leave of late.

There’s a simple reason for Deutsche Bank’s continued talent hemorrhage. “The pay was horrible this year – and unlike a lot of the other times it was horrible,” one recently departed banker said. “A-players were penalized just like the B- or C-players were.” Compensation was also “brutal” relative to other banks, he added. “It results in morale being pretty low and in confidence being down that [Deutsche] will re-emerge and be a competitive payer.”

For those still toughing it out, there’s not much grist for hope. Even though John Cryan has managed to push the bank back to profitability this year, trading has yet to fully recover. Deutsche’s investment banking business, which has been a growth target over the past few years, has continued to slide down the global league tables. And regulators are still licking their chops over high-dollar legal settlements. Also, Trump.

But pay isn’t the only gripe cited by Deutsche refugees. “If you’re happy with your company, if you’re happy with your job, you’re willing to work through the compensation issues,” said another former employee who left earlier this year. But that was not the case. “If I had to use a word, it was becoming a draining place for people,” he said. “Management changes are frequent – that filters down.”

With managing directors continuing to stream out the doors, managementchanges aren’t likely to subside anytime soon. The best argument for a turnaround in morale, then, is that it really can't get much worse. 

Deutsche Bank did not respond to requests for comment.

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