Deutsche Bank plans to rebuild Asian equity capital markets

Frankfurt

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 ECM spectrum, such as origination, distribution and research, said one of the people.

The Deutsche Bank is working with a recruiter and has started to reach out to prospective candidates in the region, including in Hong Kong and South-east 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 US$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.

The lender's Asia ECM unit will prioritise serving established clients whom they have a strong relationship with, rather than extensively courting small- to mid-sized companies, said one of the people.

The team will likely choose to follow the strategy of its counterpart in the US, where focusing on a combination of SPACs, companies in the technology sector and existing clients has proved to be profitable, said another person.

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 credit for US$738 million worth of transactions, according to Bloomberg league tables.

Among the bigger deals that it advised on for companies in the region are South Korea's e-commerce giant Coupang Inc's US$4.6 billion US IPO and online car-selling platform Autohome Inc's US$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-cheque 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.

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, Mr Sewing said at the time that Asia would be a focus for growth. BLOOMBERG