Dresdner Kleinwort has become a victim of its own success in central and eastern Europe, says a source at the bank explaining why the firm has been hit by a series of departures in recent months.
"We’ve been very successful and other people want a piece of the pie," says the source.
In June, the bank lost Petri Kivinen, head of debt capital markets, who spent most of his career at Dresdner as head of debt origination for EEMEA, to Russian firm Renaissance Capital.
His departure follows that of other senior bankers with a background in central and eastern Europe, including, in March, Carlyle Peake, head of credit syndicate, who returned to Merrill Lynch in New York.
Renaissance
The German bank has suffered particularly at the hands of Renaissance over the past year. It has also poached Bob Foresman, head of Russian investment banking; Joel Esciua, a managing director; Federico Sequeira, a director in fixed income sales; and Igor Serov, a debt originator.
Another senior banker, Matthias Warnig, a former president of the Dresdner board in Russia, who has a strong relationship with president Vladimir Putin, left in March 2006 to join Nordstream, the pipeline that Gazprom, E.ON and BASF are building from Russia to Germany.
Although Dresdner Kleinwort is not alone in losing senior CEE bankers, these departures have raised questions about the German firm’s ability to remain competitive in the one area of investment banking that it can be proud of – central and eastern Europe. In Euromoney’s Awards for Excellence, Dresdner was named best investment bank in the region thanks to strong performance across all products and services.
The source denies that the departures will have a big impact on the firm’s CEE business, where it has "built bench strength". He says that Ray Harte, for example, had already taken on Kivinen’s EEMEA origination responsibilities before the latter’s departure "so we haven’t missed a beat on that one". Harte joined Dresdner together with Kivinen from Credit Suisse in 2002. The bank has also hired Igor Lojevsky from Deutsche Bank in the new position of chairman of global banking and capital markets for Russia.
Moreover, the source adds: "Although we’ve lost a few people [in the emerging markets bond franchise], our business is much broader than before." The source cites in particular its activities in consumer finance, securitization and pre-IPO financing.
One of Dresdner’s biggest strengths is its ability to lead eye-catching trades in the local markets. The bank was, for example, the first to lead manage a Hungarian forint securitization. It has also underwritten Russian rouble bonds for borrowers including Lukoil, Wimm-Bill-Dann and Gazprom.
A banker at a rival firm reckons that Dresdner will weather the departures. "It has hurt them," he says. "But they’ve been through this before. You have to keep going."