Deutsche Bank ‘s investment banking arm lost market share across an array of key services in the second quarter. This is collected from the data of Dealogic. Its investment bank, the group’s biggest revenue generator, drove the institution to its strongest quarter in seven years at the start of 2021. However, investors have wondered how sustainable progress will be as the bank continues efforts to boost profitability after years of losses.
The group is in the process of shedding 18,000 staff globally. And that is a part of that push for a sustainable uplift in profit. Deutsche Bank reports second-quarter earnings, with analysts expecting the bank to have swung into profit. Deutsche has said that the investment bank revenue this year will be very close to the last year. And that is despite a return to more normal business after the initial pandemic-induced trading boom.
Figures compiled by financial data company Dealogic span 20 years. And that includes business lines that help companies and governments to issue bonds, sustainable financing and syndicated loans. The dip in market share in most cases is small and quarterly tallies can be choppy. But the data is disappointing for the bank. Executives had said that they expected to maintain market share gained under Christian Sewing.
Deutsche Bank declined to comment on the data. Some key takeaways from the data, plus graphics are, the second-quarter slip was broad-based across multiple businesses. One of the sharpest drops was market share for sovereign bond issuance. Deutsche Bank has been making a push into so-called sustainable financing, which Sewing recently said was at the core of its strategy. But market share fell again during the quarter, partly reversing recent gains.
Sewing has helped to stabilise the bank, boosting market share across many divisions. Sewing told that they feel reassured in their view that a substantial portion of their investment bank growth since 2019 is sustainable. This data provides only a partial snapshot of the investment bank and does not cover fixed-income and currency sales and trading. Such trading declined during the second quarter at competing U.S. banks and that is according to recent earnings reports.
Benjardin Gaertner, a fund manager at Union Investment, a big shareholder in the bank said that the Deutsche Bank will not have been able to maintain the very good performance of fixed-income trading in the second quarter. Andreas Thomae, a portfolio manager with Deka, said that he expects the investment bank to have performed well on the whole in the second quarter. Though the U.S. lenders dominate global investment banking, Deutsche remains a leading player and ranks eighth globally for investment banking fees this year.
