Deutsche Bank’s Global Prime Finance platform to move to BNP Paribas

By Rebekah Tunstead | 11 July 2019

Deutsche Bank will transfer its Global Prime Finance platform to BNP Paribas as part of the closure of its equities sales & trading business, according to Georgina Speight, Global Prime Finance’s lead technology manager at Deutsche Bank.

Upon hearing the news of the restructuring plan, Speight said on LinkedIn she was “excited to be migrating Global Prime Finance Platform technology to BNP Paribas.”

The post was later edited to reflect Deutsche Bank's press statement on the subject, and then subsequently deleted.

On July 7, Deutsche Bank announced it would be reducing its headcount by 18,000 by 2022 as part of the transformation. It also stated that it had “entered into a preliminary agreement with BNP Paribas to provide continuity of service to its prime finance and electronic equities clients, with a view to transferring technology and staff to BNP Paribas in due course.”

Deutsche Bank’s Global Prime Finance platform “allows clients to explore new markets and asset classes while improving traditional financing and trading techniques. It also serves as a foundation for providing multi-asset class financing, prime brokerage and clearing solutions.”

In an email, a Deutsche Bank spokesperson stated it would be “premature” to say that the platform is being moved to BNP Paribas because the preliminary agreement “is subject to various conditions and approvals”.

A BNP Paribas spokesperson declined to comment on the matter, instead referring to the Deutsche Bank press release.

This comes after Reuters reported on July 4 that BNP Paribas had made a pact with independent research provider Morningstar to outsource its equity research in Asia Pacific, reducing its equities analysts staff by 12.

In March, as part of Deutsche Bank’s 2018 annual report CEO Christian Sewing tried to reassure the market of the bank’s position as a strong competitor for US banks.

“We are encouraged that despite the challenging environment we have felt the strong backing of our clients. They rely on Deutsche Bank, and corporate clients in particular want a European alternative to the big US banks,” the report read.

For Stefan Muller, CEO of DGWA, a consultancy, recent investigations by the US justice department into deals Deutsche Bank made with a Malaysian state investment fund 1Malaysia Development Bhd (1MDB), are another demonstration of difficulties the bank is facing.

“Deutsche Bank were never in the first row when it came to the big deals where you make the huge money like the important IPOs. As a consequence of that they constantly lowered the level of what kind of deals they were willing to do, which means they did not concentrate on the important, rich and clean corporates, but they did business with almost everybody,” says Muller.

Investment of €13bn in technology for a restructuring of the bank’s infrastructure functions was also revealed as part of the transformation. Bernd Leukert, who will join the bank’s management board on September 1 from SAP SE, will be directing the digital transformation.

Fintech collaboration during this transformation will remain a priority, according to a Deutsche spokesperson.

“We already collaborate with fintechs and will continue to do so,” said Sen Shanmugasivam, a Deutsche Bank spokesperson, in an email.

In April, Deutsche Bank and Commerzbank withdrew from discussions of a merger, which the former said in a press release was decided after “it became apparent that such a combination would not be in the interests of either bank’s shareholders or other stakeholders.”

But mergers between European banks is becoming more inevitable, according to Muller.

“I believe we will see some M&A activity in between banks in Europe. I think that now Deutsche Bank is shrinking down to a healthier level, I think the chance that there will be mergers on a European level between German and French or Swizz banks is getting more realistic. I think this is something that we definitely need since we need stronger banks here in Europe to compete with the US and Asian investment banks.”

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