Deutsche Bank's Craigs tie-up leaves footprint in NZ after exit of securities trading arm, Infinz says

Friday 30th October 2015

Deutsche Bank's announcement that it will close its New Zealand operations as part of global cut backs doesn't amount to a complete withdrawal from the market because of its interest in Craigs Investment Partners and its ability to serve local clients from Australia, says the Institute of Finance Professionals New Zealand (Infinz).

About 29 local staff are affected by the German bank's cost cutting measures, which will see it exit from 10 countries and cut about 26,000 jobs worldwide. Deutsche's global co-chief executive John Cryan is aiming for gross savings of 3.8 billion euros by 2018, although to get there he expects restructuring and severance costs of between 3-3.5 billion euros, with about two-thirds to be incurred by 2016. Deutsche posted a third-quarter loss of 6 billion euros, which Cryan called "highly disappointing".

Deutsche's announcement comes a week after Goldman Sachs said it would shift its New Zealand securities trading business to Australia.

"From a corporate perspective, Deutsche hasn't been a lender in this market for some time - they don't really use their balance sheet in this market," said Philip King, chairman of Infinz. "It's never great to see a bank pull out but I don't really think it changes the market that much for corporates."

Deutsche owns 49.9 percent of Craigs and leaves "a pretty fully fledged" operation including investment banking in New Zealand, King said. For larger transactions it was common for local firms to enlist expertise from offshore - even including the biggest and most self-contained, such as First NZ Capital, which had a relationship with Credit Suisse, Forsyth Barr and Craigs, he said.

Deutsche's job cuts include a net 9,000 of its own workers, with the rest leaving the bank as it sheds businesses such as its Postbank unit in Germany over the next 24 months.

BusinessDesk.co.nz

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