Morning Coffee: Deutsche Bank's CEO would like everyone to work as hard as his bankers. Private credit traders keep getting more job opportunities

It is a somewhat bittersweet thought for junior bankers that when their alarm goes off on Thursday morning, and they check their messages to see another “pls fix”, they’ve already worked more hours than many people will put in all week.  If they’re on the analyst program at Deutsche Bank in Frankfurt, however, they might be able to make that same observation before the sun goes up on Wednesday.

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This is the kind of thing that makes Christian Sewing worry about the future of the German economy. As the Deutsche Bank CEO has pointed out in a recent speech, while the average European works 34 hours a week, in Germany that falls to 28 hours.  Or as an M&A associate might call it, a fairly easy start to the week followed by a late one on Tuesday.

Of course, the numbers need a little bit more interpretation than that; Germany has somewhat older demographics compared to the rest of Europe, with a larger proportion completely outside the labour force or only working part-time.  So when Sewing says that “we simply have to tell our fellow citizens that we have to do more again”, he’s actually calling for quite a big change – in order to close that six hour gap, the Germans who are actually working would have to put in quite a lot more than the EU average. 

Things would certainly have to change a lot for the average German worker to catch up with Deutsche Bank, however.  According to our most recent survey, the average employee in Deutsche’s investment bank worked 62.6 hours a week, while the average for the bank as a whole was 55.9 hours.  That’s more or less in line with its peers (some US bulge bracket and boutique banks report much higher numbers to Wall Street Oasis, but the responses there might be skewed toward ambitious juniors).

Sewing’s speech should probably be seen in the context of a wider cultural project.  Although a slight majority of Deutsche Bank’s 90,000 employees work outside Germany (which, given the size of its retail network, means a substantial majority of the actual hours are worked overseas), the German staff seemed to account for most of the resistance to last February's “back to office” campaign.  It must be frustrating for Deutsche’s top management to be constantly delivering a message of “we’re demanding a lot of our people but rewarding them for success” and finding that in Germany at least, they're completely out of tune with the national spirit.

In many cases, an excessive interest on the part of a bank chief executive in matters of macroeconomics and global competitiveness is to be mistrusted.  It’s often an early symptom of turning into a regular Davos attendee, being photographed shaking hands with politicians and generally trying to act like a global states person rather than running the business.  But in this case, the motivation just seems more simple – Christian Sewing wants people to embrace hard work.

Elsewhere, the in-demand skill in credit trading continues to be the ability to make markets in private credit-originated loans.  Apollo Global Management is the latest big player reported to be looking at setting up a new trading operation, after Golub Capital, Citi and JPMorgan.

As we noted last year, it’s a bit of an oxymoron – “private credit trading”.  If it’s being traded, with market makers giving two-way quotes, in what sense is this private any more?  In the current economic environment, as well, one might have thought that the big private credit firms would be less keen to do something which might set a lot of market prices which could differ from the “fair value” that they wanted to hold something at.

But that might be the very point of it.  If this is turning into a growth market, then those secondary market benchmarks will be set one way or another – it might be a better idea to have some sort of toehold in the trading business to take control of it.  And if you’ve got a market making business, it’s less easy for the Street to know when you decide to unload some of your own stuff.  Credit people would do well to keep an eye on this market, because the combination of fast growth, deep-pocketed players and illiquid assets often generates some very good pay opportunities.

Meanwhile …

It has to be considered a pretty significant cyclical indicator market that not only has Andreessen Horowitz closed down the Miami office which they opened up to be on the ground in the exciting ICO and NFT scene, but that they did so because none of the employees could be bothered to go there.  Even an Instagram tour from one of the firm’s partners back in March didn’t help. (Bloomberg)

Although the email and text-speak generations would practically rather lose an earlobe than make a voice call, Generation Z actually prefer to pick up the phone and speak to a real human being, because they think it’s fancy and high-status. (Business Insider)

Vincent Hall has come back to Citi to work as a sales trader, after two years at Citadel.  It probably says something about the changing shape of the industry that this looks like a good get for Citi.  (TheTrade)

Another growth market (although one that’s harder to see job opportunities in because it’s mainly automated) is in FX market making.  BlueCrest is the latest big firm to enter this space, keeping committed to its “none more boring” branding strategy by called the thing “BlueX” (Bloomberg)

Taking its pick of the Credit Suisse research department has allowed UBS to leapfrog JPMorgan in the UK’s Extel awards, although Bank of America and BNP Paribas Exane held on to the top two spots. (Financial News)

Keeping a “work journal” might be an idea that busy bankers instinctively shy away from, but noting down the things that go well or badly for you is often a good way to spot patterns and focus your career.  (FT)

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