Deutsche Bank Sees Wall Street Trading Surge After Pfizer News

Deutsche Bank AG has seen a surge in trading across Wall Street since the U.S. election and news of a possible coronavirus vaccine, sustaining a rally that boosted third-quarter revenue across top investment banks.

“The past couple of days since Pfizer’s groundbreaking announcement and what we all hope will be an inflection point in this pandemic, the street has seen quite tremendous volumes as a consequence of that,” Christiana Riley, Deutsche Bank’s chief executive officer for the Americas, said at Bloomberg’s Future of Finance virtual event on Wednesday.

“All of us who have been in this industry long enough know that a couple of days do not make a quarter,” she said. “But there was always going to be a a degree of election bounce-back certainly here in U.S. markets -- we’ve seen that since the clarity that came over the weekend -- and the Pfizer announcement has just accelerated that trend.”

The comments suggest that the trading boom that has lifted Deutsche Bank earnings for the past year is continuing in the final months of the year, providing support for Chief Executive Officer Christian Sewing as he presses ahead with the bank’s most far-reaching overhaul in decades. Revenue from fixed income trading -- a traditional strength of the firm -- jumped 47% last quarter, beating all but one of the large Wall Street peers.

Sewing has maintained a sizable U.S. presence to give European corporate clients access to the country’s deep capital markets. Riley took responsibility for the Americas last July and the bank said at the time that her appointment underscored its commitment to the U.S, which Sewing has called Deutsche Bank’s most important market after Germany.

‘Benevolent’ Conditions

Riley cautioned that it’s unlikely trading conditions next year will improve even further, after the market volatility seen in the first half of 2020. Still, the environment should remain “benevolent” for trading, she said.

Riley joined Deutsche Bank in 2006 and was chief financial officer of its corporate and investment bank before taking her current role. She’s the only woman on Deutsche Bank’s 10-member management board.

Executives at the Future of Finance conference have discussed risks and opportunities arising from pandemic. On Tuesday, Robert Kaplan, head of the Federal Reserve in Dallas, told the event that the resurgence of Covid-19 jeopardizes the next two quarters for the U.S. economy, which is poised to bounce back. It’s almost a certain that there are also going to be issues with the massive amount of sovereign debt that has been issued during the crisis, Swiss Re’s CEO Christian Mumenthaler said.

Yet that turmoil has benefited investment banks. Credit Suisse Group AG CEO Thomas Gottstein said volatility will be “the name of the game” for the next few months on concerns around how quickly a virus vaccine will be ready, as well as the knock-on effect on the economy and corporate health.

Deutsche Bank is among securities firms to signal that it will reward the traders who delivered that bumper performance, with Chief Financial Officer James von Moltke saying his firm has been accruing funds to pay commensurate bonuses.

Riley backed that view on Wednesday, saying the lender will reward staff for that performance “in a way that is consistent with competitive market practices.”

©2020 Bloomberg L.P.

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