Deutsche Bank traders reaped US$35mil on Turkey crisis
LONDON: Deutsche Bank AG fixed-income traders generated a US$35mil profit in two weeks as economic turmoil in Turkey triggered a slump in assets across emerging markets, according to people with knowledge of the matter.
The traders, who work on a desk focused on central and eastern Europe, the Middle East and Africa, made more than US$10mil on Aug 10 when the Turkish lira plunged the most in almost two decades, the people said, asking not to be identified discussing private information.
The team was positioned to profit from any slump in asset prices across the region, they said.
The world’s biggest financial firms are feeling the impact of tumult in Turkey, where US sanctions and tariffs sparked by the imprisonment of an American pastor have collided with an already overheating economy.
A senior Barclays Plc credit trader was said to have faced losses of about £15mil (US$19mil) when he was caught on the wrong side of a wager on Turkish bonds over several days in the past week, according to people familiar with the matter.
The Deutsche Bank desk, run by Aditya Singhal, has made about $US135mil this year, the people said.
The group trades across credit tied to borrowers from the so-called CEEMEA region, foreign exchange and rates products. Singhal has been leading that group since the end of 2016.
The credit team has made US$45mil this year under head trader Niru Raveendran, with a quarter of those gains coming just in the past week across bond and derivative trading, the people said.
Deutsche Bank’s trading gains may provide some respite for chief executive officer Christian Sewing, who is overhauling the fixed-income business after years of under-performance and fines for misdeeds. In July, Germany’s largest lender vowed to maintain its place as the world’s fourth-largest trader of fixed income and currencies, pushing back against calls for a more radical restructuring.