On the face of it the timing looks odd.
London’s corporate finance markets have been moribund for a couple of years, with M&A deal volumes depressed and IPOs virtually an endangered species. Thousands of jobs have been lost and there is tumbleweed blowing through the offices of some of the City’s biggest advisory names.
So Deutsche’s eye-catching move on Numis this morning is intriguing. It is also something of a relief.
At a time when confidence in the capital’s future status as Europe’s financial centre has been rattled here is a major name saying “we still believe in London.”
Numis advises almost a fifth of the FTSE 350, giving Deutsche a healthy platform to compete for more clients towards the upper end of the index.
The deal fills a big hole for Deutsche. It has around 7000 staff in the UK and is one of the City’s biggest employers — but only 35 are engaged in corporate advisory work
The Germans say they want to build up the team rather than wield the job-cutting axe, though there are expected to be some limited redundancies.
The rationale for giving the biggest bank in Europe’s largest economy greater access to corporate clients quoted on Europe’s biggest stock market looks compelling. But it is a highly competitive market with limited activity.
Although Deutsche says its team will be largely British-led, the German culture is to take a long-term view. Just as well — it may have to be patient.
There will come a time when the City is humming with deals and flotations once again. But that day is not now.
