Deutsche Bank is rebuilding an energy trading business it largely stepped away from more than a decade ago, bringing on a string of senior hires from rival banks to staff the effort. The push marks one of the German lender's more concrete moves back into a commodities market it once had a meaningful presence in before retreating after the financial crisis.
Among the hires are Madhav Janakiraman and Benoit Bosc, both of whom previously traded at Goldman Sachs, along with at least two senior commodity sales executives from Morgan Stanley. Pulling talent directly from two of Wall Street's most established commodities operations signals that Deutsche Bank intends to compete for institutional clients rather than build a smaller, niche operation.
Energy trading is a business that rewards scale, relationships and risk appetite built up over years, which is part of why so few banks have successfully reentered it once they have exited. Deutsche Bank's decision to rebuild now comes as energy markets have seen heightened volatility in recent years, conditions that can make trading desks more profitable but also raise the stakes for a bank still establishing its footing in the space.
The rebuild fits into a broader pattern at Deutsche Bank of trying to expand its investment banking franchise in select areas after years spent stabilizing its balance sheet and cutting costs elsewhere in the business. Rather than spreading resources thin across many new ventures, the bank appears to be concentrating its hiring on specific, well resourced pushes like this one.
Whether the new desk can compete with established players such as Goldman Sachs and Morgan Stanley will depend on how much capital and risk appetite Deutsche Bank is willing to commit behind its new hires, not just how experienced those hires are individually. For a bank that spent years retreating from riskier trading businesses, the energy push is a signal of where it now sees room to grow again.