Deutsche Bank says it is committed to the Australian market and expectations are the firm will appoint a successor to high-profile local boss Michael Ormaechea within months.
Street Talk on Friday revealed that Mr Ormaechea, who has dual roles as Deutsche's Australian chief and head of global markets for Asia Pacific, will retire after 22 years at the bank.
A memo to staff said Mr Ormaechea, 52, wanted to spend more time with his family after many years of extensive travel commitments. He was unavailable for comment on Friday.
Sources suggested the decision also had to do with a global restructure and Mr Ormaechea's reluctance to commit to stay at Deutsche - which has endured a tumultuous period – for another three to five years.
Potential successors among Deutsche's local executive ranks include joint heads of corporate finance James Roth and Bruce MacDiarmid, equity capital markets boss Michael Richardson and co-heads of markets Kevin Kosovich and Vic Jokovic.
Deutsche's Asia Pacific boss Werner Steinmüller told local staff the bank was "committed to our business in Australia, which we consider one of our key markets in Asia Pacific".
"We have built a formidable franchise in Australia, boasting deep client relationships, world class products and structuring capabilities, and excellent connectivity with the rest of our global platform," Mr Steinmüller said
Smooth transition the focus
He highlighted marquee transactions in the past year including Deutsche's sell-side role in advising the NSW government on the sale of a stake in Ausgrid, the auction of Arrium's Moly-Cop business, the float of Viva Energy, and the Australian Office of Financial Management's 30-year bond issuance.
Mr Ormaechea will work closely with Mr Steinmüller over the next few months to ensure a smooth transition period for the local business.
His departure comes, however, at a still challenging time for Deutsche.
Deutsche's global chief John Cryan is preparing to report fourth-quarter earnings next month amid expectations of a dire bonus period and that payments will be largely stock-based.
In late December, the bank reached a $US7.2 billion agreement to resolve a US investigation into its mortgage-backed securities dealings.
The settlement includes a $US3.1 billion civil penalty and the bank paying $US4.1 billion in consumer relief.
Locally, a changing of the guard may also prove unnerving for staff as Mr Ormaechea replaced James McMurdo only in February 2016 as country head, after the latter was elevated to run Deutsche's APAC corporate and investment bank.
Praise for 'intellectual rigour'
Deutsche's head of global markets Garth Ritchie told staff of Mr Ormaechea's "intellectual rigor", as he appointed David Lynne and James Boyle to become co-heads of global markets in APAC. They maintain regional responsibilities for fixed income and currencies and equities respectively.
Mr Ormaechea is known for thriving on complex transactions. Those include harnessing derivatives swap contracts to help companies mount surprise share raids.
Last year, Deutsche conducted several cash-settled share swap transactions in Australia including for Bermuda-based billionaire Bruce Gordon in Nine Entertainment and the Ten Network.
Deutsche finished 2016 ranked fifth for work on mergers and acquisitions in Australia and was in sixth position for equity capital markets, according to Dealogic. In equities trading, Deutsche had the second-largest market share behind UBS.
In debt capital markets, Deutsche finished fifth, behind the Big Four banks in Australian domestic bonds, and in third spot for Kangaroo bonds.
The eventual handover at Deutsche Australia will follow a fluid past two years at the helm of investment banks with local operations.
Morgan Stanley, Citigroup, Macquarie Capital and Credit Suisse have all experienced succession plans over that period.
