2024-01-05 16:54:29
Many US banks such as JP Morgan and Goldman Sachs, which will be presenting their full-year figures for 2023 starting next week, showed an opposite trend after the first nine months of 2023: interest income was strong, consulting fees were weak. In particular, the supreme discipline in investment banking, advising companies on company acquisitions (M&A), has no longer been in demand since the Corona pandemic. According to the statistics service provider Dealogic, the global fee volume of all banks fell again by 23 percent to 2.9 trillion euros in 2023. Deutsche Bank is obviously convinced that this is a temporary phenomenon.
While Goldman Sachs, for example, has cut jobs, Deutsche Bank is bucking this trend and increasing its M&A advisory services and has now brought in a top-class investment banker from the competition: Alison Harding-Jones is coming as the new global head of M&A from Citigroup in London, where She led the M&A business in Europe, the Middle East and Africa (EMEA). Previously, she worked for the Swiss UBS for 25 years. Berthold Fürst and Bruce Evans, who have co-led Deutsche Bank’s M&A business for the past 18 months, will continue in their roles as co-heads of Investment Banking Coverage EMEA and heads of Investment Banking Coverage Americas, Deutsche Bank said upon request. Harding-Jones, one of the very few women in a management position in the capital markets business of a major bank alongside Dorothee Blessing (JP Morgan) and Souad Benkredda (DZ Bank), will report to Mark Fedorcik, one of the global co-heads of the investment banking division.
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An upswing in the M&A business would not be entirely unexpected. The rapid rise in interest rates since spring 2022 has reduced the valuation of companies and real estate, but has now come to an end, at least for the time being. This makes it easier for buyers and sellers to approach each other with their different price expectations. Private equity companies in particular have companies in their portfolio that they would like to sell soon. That’s why in Germany, for example, the perfume chain Douglas, the meter reader Techem and the pharmaceutical retailer Stada are named as candidates for an IPO. However, it is also possible that these companies will be sold to a competitor. Then the M&A advisors in the banks would come into play.
Archibald Preuschat and Hanno Mußler Published/Updated: , Recommendations: 10 Hanno Mußler Published/Updated: , Recommendations: 13 A comment from Hanno Mußler Published/Updated: Recommendations: 5
In 2023, the importance of investment banking for Deutsche Bank’s profits has also decreased, but less so than for many US competitors. The capital market business contributed 2.3 billion euros, a good 100 million euros less than in the previous year, to the consolidated profit after nine months. Unusually, this was less than the private customer business. And the corporate customer division generated significantly more than in the previous year due to the higher interest rates, so that the consolidated profit in 2023 increased from 6.9 to 7.1 billion euros in a nine-month comparison.
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