Two local Deutsche units are leaving

High-profile sections are being moved to N.Y.

About 48 people involved

October 05, 2002|By William Patalon III | William Patalon III,SUN STAFF

Deutsche Bank AG is shifting two high-profile units from Baltimore to New York, as the company pushes forward on initiatives to boost competitiveness and streamline operations, bank officials confirmed yesterday.

The German bank - parent to the former Alex. Brown & Sons of Baltimore - is also continuing to add local employees.

"There is no underlying plan ... to exit this town," said David M. DiPietro, a Deutsche Bank vice chairman who heads the locally based Deutsche Bank Alex. Brown Private Client Division. "There is no logical reason for us to do that."

The two groups being shifted from Baltimore to New York are the equity capital markets desk and the health care investment banking unit, the bank confirmed. Each unit has about two dozen employees, the bank said.

More significant than the workers may be the prestige that leaves with the units. The equity markets unit, in particular, participated in some of the best-known initial public stock offerings of recent years, notably Krispy Kreme Doughnuts Inc. and ATT Corp.'s Wireless Group.

Over the past month, Deutsche Bank has shifted its global corporate travel services unit to Baltimore from New York. It continues to add employees locally to its brokerage and wealth-management businesses.

When all the moves are completed, the former Alex. Brown will have about 800 workers in the Baltimore region. When that investment bank was acquired by Bankers Trust Corp. in 1997 - prior to that bank's takeover by Deutsche Bank - about 1,500 of its 2,700 U.S. employees were in Baltimore.

The jobs that have been lost here have been sacrificed to cost-cutting and competitiveness.

The cuts will bring the total announced to 12,970, or about 14 percent of the bank's work force. Deutsche Bank wants to eliminate nearly $2 billion in costs by the end of 2003.

However, the bank is moving the two groups to New York to boost competitiveness - not to cut costs, Deutsche Bank officials said.

"Our equity capital markets desk is the group that underwrites new [stock market] issues," said Doug Baird, Deutsche Bank's head of equity capital markets, who will be making the move himself.

"There's really a need to centralize this [with related groups]. Institutional sales is based in New York. Research is based in New York. Investment banking is in New York. ... There's really a need [for the equity group] to be in the middle of all this."

Deutsche Bank said the health care investment banking group also needed to be in New York, where another 15 members of the group already are based.

Having that entire unit in New York will make it easier to serve existing clients - and to pitch business to potential new clients, officials said.

These prospects often come to New York and make so-called "whistle-stop" tours of all the large money-center banks, and decide which pitch best suits their needs. That makes it essential to have the entire group in that one place, bank officials said.

Employees in the equity desk and the health care group are being given the choice of relocating to New York or accepting an unspecified severance package.

Members of the equity desk are being asked to make the decision soon, although Baird declined to specify the deadline. The health care group will be moved over the next six to nine months, the bank said.

Roughly a month ago, Deutsche Bank relocated its entire global travel services group - about 30 people - from New York to Baltimore.

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