Morning Coffee: Will JPM, HSBC and Citi come after Deutsche staff in Asia?

Deutsche Bank’s fixed income and foreign exchange employees in Asia could be among the losers as new CEO John Cryan potentially looks to cut some of the capital-intensive businesses championed by exiting co-chief executive Anshu Jain.

Reuters reports that while Deutsche’s trading businesses accounted for 66% of its Asia-Pacific revenue of US$4.3bn in 2014, they are also tying up an increasing amount of capital due to tougher regulatory requirements and relatively illiquid markets. “This might reduce the market participation of Deutsche Bank in fixed income and FX trading and create more room for other banks to grow in Asia,” Anshuman Jaiswal, a senior analyst at consultancy Celent, told Reuters.

Which banks would be keenest to hire Deutsche’s Asian traders if the German firm did cut back? J.P. Morgan, Citigroup and HSBC would be among those trying to eke out more market share, according to Reuters. “This might signal the end of the dominance of the bank in the Asian FX and fixed income space,” said the head of trading at another European bank in Hong Kong, who declined to be named. “While not immediately, they will certainly yield market share in the coming months”.

Going by what the bank itself is saying (at least for the moment), its Asian traders shouldn’t be feeling too anxious. Deutsche told Reuters it remains committed to “defending its long dominant market position in Asia Pacific FX and fixed income markets, with a franchise that is currently performing at record levels”. Nevertheless, expect a flurry of phone calls, emails and meetings between headhunters and Deutsche traders in Hong Kong and Singapore in the coming weeks.

Meanwhile

HSBC aims to be the leading international bank in Singapore. (Business Times)

HKEx to fight algo and high-frequency trading in Hong Kong. (South China Morning Post)

Chinese companies listed in the US are looking to go private in the hope of relisting in China. (Wall Street Journal)

How to hire an intern in Singapore. (Asean Briefing)

COO of Hong Kong hedge fund Lim Advisors departs. (Asian Investor)

CFOs in Asia Pacific are confident about their regional business prospects, says Bank of America Merrill Lynch survey. (Straits Times)

Westpac splits retail and business divisions. (Reuters)

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