Deutsche Bank Plans Asia Equity Capital Markets Rebuild

Deutsche Bank AG plans to rebuild its equity capital markets business in Asia, seeking to stage a comeback amid strong demand for share sales, according to people with knowledge of the matter.

The Frankfurt-based lender, which shuttered the majority of its equities business in Asia Pacific in 2019, plans to hire 10 to 12 bankers, said the people. The bank is looking to hire in roles across the spectrum to support its ECM business, including in origination, distribution and research, said one of the people.

Deutsche Bank is working with a recruiter and has started to reach out to prospective candidates in the region, including in Hong Kong and Southeast Asia, the people said, asking not to be named as the information is private.

The move comes as global initial public offerings have already delivered the best quarter since at least 2009, with more than $200 billion raised so far this year, according to data compiled by Bloomberg. After a sustained boom last year in special purpose acquisition companies, and with interest rising in Asia, the case for partially reversing cuts to equities has grown harder to dismiss.

Deutsche Bank’s Asia ECM unit will prioritize serving established clients the lender has a strong relationship with, rather than extensively courting small- to mid-sized companies, according to one of the people. The team will likely choose to follow the strategy of its counterpart in the U.S., where focusing on a combination of SPACs, companies in the technology sector and existing clients has proved to be profitable, another person said.

Shares of Deutsche Bank were up 0.8% at 4:17 p.m. Wednesday in Frankfurt, giving the firm a market value of about 21.9 billion euros ($25.9 billion). Discussions with prospective candidates are ongoing, and the number of new hires could change, said the people.

A representative from Deutsche Bank declined to comment.

The German bank currently ranks 29th in Asia Pacific equity offerings, earning $738 million worth of deal credit, according to Bloomberg league tables. Among the bigger deals that it advised on for companies in the region are South Korean e-commerce giant Coupang Inc.’s $4.6 billion U.S. IPO and online car-selling platform Autohome Inc.’s $689 million Hong Kong listing.

Deutsche Bank is one of the few major firms that had a significant SPAC business long before it was fashionable. The blank-check wave is a significant opportunity for the bank and can be an important driver of profitability, said Barclays Plc analyst Amit Goel.

The German lender revamped its investment bank in Asia in 2019 by folding its financing and structured debt operations into the division and making job cuts. A majority of the ECM bankers in Asia were let go, Bloomberg News has reported. The plan was part of a restructuring unveiled by Chief Executive Officer Christian Sewing, and included a target of about 18,000 job cuts by the end of 2022. Despite the cuts affecting all regions, Sewing said at the time that Asia would be a focus for growth.

Deutsche Bank will build the next phase of its transformation, Sewing wrote in its annual report earlier this month. Thanks to progress in reducing costs, the bank was on a good path to make targeted investments this year, he told analysts in prepared remarks in February.

The investment bank has been the standout performer for the German lender during the pandemic. Last year’s strong showing by the unit continued in 2021, with revenue up 20% this year, Chief Transformation Officer Fabrizio Campelli said last week.

©2021 Bloomberg L.P.

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