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Investment bank Berenberg cuts 5pc of staff as recession chill hits the City

·2 min read
Berenberg bank london
Berenberg bank london

A major European investment bank is axing more than 5pc of employees in London as a recession chill hits the City.

Bosses at Berenberg, Germany’s oldest lender, told staff on Monday that around 30 jobs will be cut as dealmaking dries up and recession fears mount, The Telegraph can reveal.

The bank currently has around 500 employees in London, a Berenberg spokesman said, including administrative staff and those working in its private wealth arm.

Berenberg is one of the first investment banks in the City to trim its headcount as the economic outlook darkens. The Bank of England warned last week that the UK is set to face a 15-month recession from the end of this year.

Stock market listings and equity raises — both big revenue drivers for boutique investment banks like Berenberg — have already ground to a halt since Russia’s invasion of Ukraine at the end of February.

In an email to staff on Monday, seen by The Telegraph, David Mortlock, Berenberg’s managing partner, said: “Clearly 2022 is a much more challenging environment. In terms of equity issuance, it’s the quietest year since 2003 and one of the biggest [year-on-year] declines ever.

“In response, we have taken steps to ensure the cost base of our investment bank is appropriate. We materially slowed hiring at the beginning of the year, reset our US business in June and have now adjusted our European platform. We have also taken action to reduce central costs across the bank.

“Although many of these decisions are difficult, acting early and decisively means we can be confident in the sustainability and gearing of our business heading into 2023 and beyond.”

In June, Berenberg laid off nearly one-third of bankers in its New York office, around 50 employees, citing difficult market conditions.

The job cuts highlight how rapidly the fortunes of City investment banks have deteriorated after a highly lucrative post-pandemic boom in dealmaking last year.

Berenberg is coming off a record year for its investment bank, where advisory fees and equity trading revenue hit €471.6m, an increase of more than a third.

Last year, Mr Mortlock took home €20m (£16.6m) after the best twelve months in Berenberg's 432-year history.

A spokesman said: “After the reduction of 50 jobs in the USA, communicated in June, there are currently no other major changes in the number of employees beyond the usual adjustments that always take place.

“We have postponed the staff growth planned at the beginning of the year for the time being due to geopolitical events and developments in the markets.”