Deutsche Bank AG’s Nicholas Pappas, who helped run credit-trading in New York, departed the firm as Germany’s biggest lender cuts jobs and bonuses and after risk-curbing regulations changed the way banks broker debt.
Pappas, most recently co-head of flow credit trading for North America, left the bank this week, according to a person familiar with the matter who asked not to be identified. Pappas declined to comment, as did Renee Calabro, a spokeswoman for the bank.
Pappas’s exit from the bank follows that of Antoine Cornut, the firm’s head of flow-credit trading in the Americas and Europe, who left the Frankfurt-based firm for a hedge fund in July, people familiar with that matter said at the time. Tom Hartnett was named to oversee investment-grade credit in North America in addition to interest-rate products.
Deutsche Bank said in July that it will eliminate 1,900 jobs, including 1,500 at the investment bank and support areas, by the end of the year as Chief Executive Officers Anshu Jain and Juergen Fitschen face declining revenue from the unit. Revenue at the investment bank dropped 63 percent in the second quarter, with income from placing debt declining 11 percent.
At least 11 credit traders have exited Deutsche Bank’s New York credit dealer since the beginning of 2011 as the lender capped cash bonuses at 100,000 euros ($127,890) last year. With regulators seeking to limit the kind of risk-taking that amplified the housing crisis four years ago, banks have slashed or deferred pay while reducing the amount they’re willing to wager in markets.
The 21 primary dealers that trade directly with the Federal Reserve have cut their holdings of corporate securities due in more than a year to $43.4 billion as of Aug. 29 from a peak of $235 billion in October 2007, Fed data show.
The Frankfurt-based firm is the third-biggest underwriter of corporate bonds worldwide this year, according to data compiled by Bloomberg.
Pappas joined Deutsche Bank in October 2007 from Goldman Sachs Group Inc., according to records maintained by the Financial Industry Regulatory Authority. He previously worked at Bear Stearns & Co.