If these are bear markets, it is certainly not evident in Nomura’s latest round of hiring from rival Deutsche Bank. In one of the most aggressive hiring moves this year, the Japanese firm has poached 10 coverage bankers to help build its debt platform in Asia.
The most senior hires are Daniel Mamadou, who was previously co-head of capital markets and treasury solutions (CMTS) for Asia (ex-Japan) at Deutsche Bank; Djamal Attamimi, who was previously co-head of CMTS for Southeast Asia and head of corporate finance coverage, Indonesia; and Christopher Chan, head of CMTS for Singapore. All three were managing directors at Deutsche and are expected to join Nomura in November. They left the German bank early this month.
Earlier, the firm had also hired Martin Syquia, head of CMTS for the Philippines.
At Deutsche, CMTS is basically a coverage role that includes selling clients a wide array of products ranging from rates, forex, commodities and various financing solutions.
Nomura is also said to have hired six coverage bankers based in Singapore — Richard Ng, Gerard Yuen, Dicky Yordan, Amir Amiruddin, KC Lim and Mohammad Afaq. These bankers had held director or vice-president positions at Deutsche and left last week.
Nomura’s aggressive hiring and its timing are surprising. Globally, banks are announcing plans to lay off staff despite reporting profits and the macroeconomic outlook turned distinctly less rosy during the past six months.
While observers note that Nomura offers bankers the opportunity to be part of a franchise that is building in Asia, the word on the street is that it has also opened its cheque book generously to lure the bankers over. Market sources say that Nomura offered some of the bankers pay increments of between 70% to 100% for the first and second year, and it is believed that at least one individual was offered a profit share.
Back in 2008, many banks on the street, including Deutsche, cut the variable pay of their managing directors in response to the dire market conditions. But one source said that Nomura’s offer takes pay levels “back to pre-crisis days”.
Since the departures, Deutsche has elevated two of its co-heads to become sole heads. It has appointed Venky Vishwanathan, who was previously a co-head with Mamadou, as the sole head of CMTS for Asia ex-Japan. Sreenivasan Iyer, previously a co-head with Attamimi, has been appointed sole head for CMTS in Southeast Asia.
At Nomura, Mamadou will head the corporate solutions and financing group, and will report jointly to Jai Rajpal, head of fixed-income for Asia ex-Japan, and Patrick Schmitz-Morkramer, head of investment banking for Asia ex-Japan. He will also report to Philippe Dufornier, the head of global finance. Attamimi will head the financing group for Asia ex-Japan, while Chan will head the corporate solutions team. Both will report to Mamadou.
The sudden departure of senior bankers is reminiscent of March 2010 — when a trio of bankers, namely Michael Luk, Jimmy Choi and Kang-Jae Kim — left Deutsche to join Bank of America Merrill Lynch. While there had been concern about the effect on business when the trio left, Deutsche’s fixed income business managed to weather that.
However, rivals note that the firm, traditionally a strong fixed income house, is moving into a defensive position as debt markets have become increasingly competitive. According to Dealogic, Deutsche Bank is placed third in dollar bond league tables for Asia ex-Japan, behind HSBC and Citi. Nomura is not among the top 10 banks. Deutsche was absent on the recent Republic of Philippines peso global mandate, and some cited Syquia’s departure as a possible reason.
Despite the departures, the bank still has a deep bench. According to a source close to the bank, Deutsche has lost 10 out of more than 260 capital markets and treasury solutions bankers in Asia ex-Japan, and six out of more than 60 CMTS bankers in Singapore. Among the remaining bankers in Singapore, half are managing directors or directors.
The departures have taken place amid Deutsche Bank’s integration of its corporate coverage group with the investment bank. The reorganisation took place mid-last year and as a result of that, the CMTS group was set up early this year.
The intention behind the integration was to drive up volumes by cross-selling between different products. A CMTS banker with a cash management mandate from a client could, for instance, sell the same client an interest rate hedge or a forex hedge. This effectively gives a client access to a suite of products from a single banker and also generates additional revenues for the bank.
While the reorganisation has driven sales and is deemed to be positive for business in the long term, in the interim it is said to have caused some frustration among staff and has been cited as a possible push factor for some bankers.
In the meantime, though, the latest round of departures could throw up a fresh round of musical chairs within the industry.
Deutsche and Nomura both declined to comment.