Deutsche Bank said to merge units to preserve capital and cut costs

Lanes Merge Road Sign

The urge to merge.

Bloomberg news reports that Deutsche Bank is consolidating two debt-trading groups in London as it seeks to cut costs and riskier holdings, leading its head of European investment-grade bond trading to leave.

Vassilis Paschopoulos departed this month as the bank combined its investment-grade debt and asset-backed securities trading units, according to two people with knowledge of the matter.

The merged unit will be led by Nick Waring, said the people, who asked not to be identified because the moves haven’t been made public. Separately, two other credit traders, Alexis Serero and James Nowak, left the London office with plans to join competitors in September.

'These things tend to be driven by a combination of capital and cost cutting', said Steve Hussey, head of financial institutions credit research in London at AllianceBernstein, a unit of AlianceBernstein, which manages the equivalent of about $443bn in assets. 'All investment banks are under intense capital pressure but Deutsche Bank especially is at the sharp end given the growing focus on leverage ratios. It has a huge balance sheet, with a huge inventory, derivatives, repo'.

Hit the link below to access the complete Bloomberg article:

Deutsche Bank Said to Merge Debt Groups as Top Trader Leaves

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