Deutsche Bank, a German-based financial service provider, has missed its ranking as a top three investment bank in the world. The weak EURO as well as the bank's restructuring approach pushed it to the fifth place in the investment sector. Currently, the bank is after Bank of America and Citigroup, both of which shared the number three position with Deutsche in 2015.
The data from Coalition showed that JPMorgan ranks as the top player in the industry, tailed by Goldman Sachs, which maintained its second place after a robust performance in cash equities, G10 overseas exchange products and G10 rates trading. Financial Times quoted Ram Nayak, chief of fixed income at Deutsche Bank, who said that the results mirror a well-identified shift in the bank's business policy, which concentrated on offering a quality service to a small group of customers over a variety of products.
As part of its restructuring program, the German-based lender reduced 9,000 workforces in October, scaling back from 10 nations with an aim to reduce funds to its markets business in order to reinstate confidence among investors. The restructuring move resulted in a 10% reduction in the bank's markets arm's balance sheet over the previous year. The move also cost the bank roughly 2.5% of markets revenues.
In addition, the bank's position in the industry was impacted by the weakening of sterling and euro against the U.S. dollar in 2015. The bank recorded gloomy numbers during the final three-month period of 2015, despite an increase in its banking and securities unit's revenues by 4%. Analysts anticipated the bank's trading revenues to fall sharply in the initial quarter of 2016.
According to THE WALL STREET JOURNAL, the gloomy state in the European investment banking sector has increased investors' anxiety over a recession, falling prices in the commodity markets, and also regarding banks' capacity to earn profits. The economic slowdown has also put Deutsche Bank under pressure, which requires two additional sinewy years before returning to routine, according to John Cryan.
The poor performance of the bank in the past period has led the new chief executive officer John Cryan overhaul policies to improve the financial condition of Deutsche Bank. Cryan, who condemned the bonus strategy in the bank, has shuffled the board and is said to be working 15-hours a day to enhance the bank's business. Meanwhile, revenues from the bank's rates-trading unit continue to fall during the past six week period, despite the overall business growth across Wall Street, BUSINESS INSIDER said citing sources.
France investment banks like Societe Generale and BNP Paribas earned higher revenues in 2015, even though they occupied the lowest slots in the Coalition's rating. Moreover, 2015 marked the best year for the investment banking unit of Goldman Sachs.
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