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Deutsche Bank to rebuild South African presence

Deutsche Bank AG plans to start rebuilding its South African workforce after announcing job losses and cost cuts last June as part of a global restructure.

“The hiring we’re currently pursuing is geared toward enhancing the areas where we have global and local strengths, such as fixed income,” said the bank’s South Africa chief executive officer Muneer Ismail. “In the next two-to-three months we should be back to fighting strength.”

The policy reversal follows a similar announcement last week on Deutsche Bank’s plans for the Middle East, where the bank intends to rebuild after a lengthy period of cost cutting and is hiring executives to help win debt and advisory deals.

In South Africa, the bank has named Gregory Scott as its new head of corporate finance coverage and plans to hire 26 people for that unit and in others such as fixed income and corporate treasury solutions, Ismail said.

Deutsche Bank entered the South African market in 1979 and opened a Johannesburg head office in 1998, offering corporate-finance advisory services, equities research and trading, foreign-exchange and fixed-income trading as well as global transactional banking.

Selective hiring

The U-turn follows Deutsche Bank’s announcement last June that it would terminate its advisory, corporate-broking and sponsor-services in South Africa, shedding up to 50 jobs.

Chief executive officer Christian Sewing aims to revive Deutsche Bank’s fixed-income trading unit, which reported seven successive quarters of declining revenue. This will partly be achieved through selective hiring after 1,135 front-office jobs were cut across the investment banking division last year.

“We are not the traditional Deutsche Bank of old,” said Ismail. “We have reshaped the business and are redirecting resources to areas where we believe we can add most value to clients.”

Deutsche Bank was the fourth-biggest arranger of bond sales in sub-Saharan Africa in 2018, up three places from a year earlier, according to Bloomberg League Tables.

Despite the bank’s renewed push into South Africa, Ismail said clients are likely to hold off from making any major strategic decisions until the country’s political outlook is clear. President Cyril Ramaphosa needs more than 60% backing to have a clear mandate to implement his planned economic reforms.

“The South African election result in May will be a key factor to look out for in terms of the bank’s deal pipeline,” he said. “Clients are telling us they are in a ‘wait and see’ mode.”

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