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Deutsche and Commerz in the spotlight


Is Deutsche Bank now a place of calm, steady, stable growth?

The investment bank capped off an impressive year when it released its fourth quarter and full 2020 results last week, although of course it has been a strong 12 months for investment banks in general. And DB's biggest revenue driver, fixed income and currencies, actually lagged most of the big US banks when comparing its year-on-year percentage gains with their FICC desks (fixed income, currencies and commodities).

The question is whether Deutsche's revenue growth is sticky. In the fourth quarter, it did in general outperform those US names across FICC, debt origination, equity origination and advisory.

Steadiness is not quite there at Deutsche's domestic rival Commerzbank. The latter doesn't report results until later this week, but has already given us a taste of what its latest strategy will mean for its corporate clients division, which houses the investment bank.

Commerzbank is looking at outsourcing equities sales and trading activities to a European partner firm, a move that would follow in the footsteps of other banks that have opted for a partnership model, and 18 months after Deutsche made its cuts to equities.

Meanwhile, equity capital markets and M&A will be further geared around existing customers, which is likely to mean depriortising hunting for mandates from firms that are not existing clients.

And the bank's plan is to support international corporate clients only if they have "German connectivity" or if "they operate in selected lead sectors with significant future potential".

Another firm to release results last week was Nomura, which recorded the best quarterly net revenues for its investment banking business in nine years, helped by cross-border M&A and Japanese activity. Equity underwriting and distribution fees increased by more than 2.5 times year on year.

Elsewhere, a big name departure at HSBC: Philippe Henry, head of global banking for Europe, the Middle East and Africa, is set to leave. An internal memo said the firm was "well advanced" in an external search for his replacement.

At Natixis, Peter Cui has been promoted to head of structured credit syndicate in the European business, replacing Dimitris Papadopoulos, who left to run CLO origination and syndication at Credit Suisse.

Houlihan Lokey, meanwhile, has picked up Stephen Taylor, previously head of ECM at Macquarie, for its ECM advisory team.

Finally, on the issuer side, two officials from the European Investment Bank are going to join the European Commission on long-term secondments, as the EU confronts large funding programmes. Marius Cara, the EIB’s deputy head of division responsible for investor relations and marketing, will join the Commission for three years to perform a similar job, building the investor relations function. Elwira Zultak, a member of the EIB’s benchmark funding team for 10 years, goes with him.

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