(Bloomberg) -- Deutsche Bank AG is closing its office in Houston and exiting oil and gas advisory as part of a strategy to pare its U.S. operations, according to an internal memo seen by Bloomberg.
The shuttering is the result of Deutsche Bank’s decision to reduce its investment banking coverage in the U.S. to seven sectors from eight previously, Mark Fedorcik, co-head of the U.S. investment bank, said in the memo to staff.
The division’s leaders “decided to rationalize our U.S. oil and gas investment banking coverage footprint,” he wrote. “Importantly, we will continue to serve our oil and gas clients through our debt and corporate banking treasury products.”
Houston is the financial hub for a local oil and gas industry that is booming, and the home of majors such as ConocoPhillips Inc., oilfield services giant Halliburton Inc. and a host of smaller-scale shale producers and pipeline companies. Deutsche Bank’s office there has over 50 staff, a person with knowledge of the matter said, asking not to be identified discussing what is a private decision.
The cuts come in the wake of last week’s announcement by new Chief Executive Officer Christian Sewing that the lender will trim its global equities business and reduce U.S. corporate finance activities with industry sectors that have few links to Europe.
Deutsche Bank plans to cut its U.S. workforce by more than 10 percent as a result of the restructuring, people briefed on the matter said previously.
About 1,000 of Deutsche Bank’s roughly 10,000 U.S. employees work in corporate finance, according to another person briefed on the matter. While the lender will slightly reduce headcount throughout the remainder of the corporate finance unit, the closure of the energy-focused Houston office will be the biggest single cut, the person said.
The memo listed other areas in which the firm remains committed to providing investment banking sector coverage:
- financial institutions
- technology, media and telecommunications
- health care
- industrials including chemicals, metals and mining
- consumer companies
- real estate, gaming, leisure and lodging
- financial sponsors
A spokeswoman for the company confirmed the contents of the memo. It wasn’t immediately clear how many jobs would be cut, and how many would be relocated to other offices.
©2018 Bloomberg L.P.