Frankfurt Market Overview August 2017

Following Delta's recent trip to Frankfurt we have summarized our core findings for your attention:

Overview

  • For the majority of bulge brackets, sector teams will largely remain in London, with only certain European banks, such as Deutsche Bank and Societe Generale, choosing Frankfurt as the hub for Healthcare, Chemicals and Real Estate sector teams

  • Base salaries are comparable to London, though total compensation packages, bar a few outliers, are allegedly lower, with the bonus component on average 20% - 30% less

  • Some platforms are discussing Frankfurt as a hub for CEE coverage in addition to the traditional DACH focus (Germany, Austria and Switzerland), servicing clients in Poland, Hungary and Romania

  • Brexit discussions have impacted real estate prices in Frankfurt, both for commercial and residential properties, with an increase of 10% - 15% year to date

Hiring Strategy

  • Currently several bulge brackets are looking to add headcount in Frankfurt to boost their sector/coverage capabilities in investment banking, outside of ongoing discussions on the relocation of London based bankers

  • Of the announced 300 - 500 members of staff to be relocated by each of the bulge brackets, only 5 - 10% are perceived to impact front office executive level positions/candidates

  • Morgan Stanley is the latest institution to choose Frankfurt as the site of its post-Brexit European hub, following official announcements from Goldman Sachs, Citi, Standard Chartered, Sumitomo Mitsui, Nomura and VTB Capital, with Bank of America Merrill Lynch leaning towards Dublin instead. The movement will not be initiated immediately but will be a step by step process, firstly impacting markets, operations and payments desks 

Barriers To Relocation

  • Works Councils, where present, have a significant impact on hiring capabilities, contract negotiation and compensation packages, adding another party into the negotiation process when it comes to headcount alterations. Though they may have a positive impact on certain processes and work morale, their role has been more prohibitive when concerning senior strategic hires on hefty compensation packages, impacting the bank’s ability to attract competitive ‘heavy hitters’ on the ground. Bulge bracket players in most cases have been conscious of headcount size to avoid having to establish Works Councils for the reasons above 

  • Employment law has a strong bias towards the employee, making restructuring of teams, when required, more complex. Dismissal based on performance is not common, if at all present, leading to employees being put in a pecking order based on age, years of service, marital status and number of dependent children, among other social factors, as opposed to the outcome of their work performance

  • Fluency in German is crucial if not mandatory to remain competitive in servicing clients, though most internal communication is in English

For the Delta house view please reach out to Irina Perova for a one on one

Best Regards,

Delta Executive Search Team

Posted by Irina Perova
Thursday 5th October, 2017

Related Mandates

Other Recent Blog Posts

Key News: Ahmed Badr Joins Credit Suisse Dubai

Friday 5th October, 2018

The team at Delta Executive Search sends warmest congratulations to Ahmed Badr and wish him all the best in this latest step of his journey

Delta Executive Search Opens Office in Zurich

Thursday 6th September, 2018

Delta Executive Search Opens Office in Zurich

Wealth Management Overview & Market Update 2018

Wednesday 22nd August, 2018

This month we have put together a Wealth Management Overview, an extended version of our monthly market update, exploring the factors impacting client coverage models for wealth management franchises in Emerging EMEA, Asia and LatAm