Two firms on a mission at the moment are Deutsche Bank and CSFB. Deutsche is determined to extract more profit out of its investment banking division and increase the company's share price in order to avoid an eventual takeover by a rival. CSFB needs to increase net earnings to prove to owner Credit Suisse that it's really worth keeping.
Now Deutsche has rolled out the wholesale bank's new management structure and staff now fear that the merging of the debt and equity businesses is merely a prelude to job cuts. Keefe, Bruyette & Woods banking analyst Matthew Clarke has said that the big issue is really 'what structural changes they'll make in terms of cost cutting'. And the biggest cost, of course, is staff.
And staff may not have long to wait until they learn what all this restructuring will mean to them. In what is being described as 'a regular annual meetings of bankers', Deutsche's top 200 executives are meeting in Berlin this week to discuss the bank's future. And 2005 budgets will be worked up in the next few weeks.
Meanwhile things over at CSFB may get worse before they get better. The Business reports that the firm is expected to post a loss when it releases its third quarter figures in November. Some are even predicting that CSFB's revenues could come out a record quarterly low. The firm is in the midst of a review of its activities and there are fears that CSFB might exit certain businesses if it isn't or can't quickly become a top player in them. Oswald Grubel, Credit Suisse's CEO, has said that he will spend 50% of his time over at CSFB in the next year or so. The stakes are that high.
Although the current CSFB management team is said to be the best the firm has had for many years, there will be a limit to the amount of time Credit Suisse will give the business to get it right. A big loss in the third quarter might force management's hand and headcount could once again quickly come under the microscope.