UK
Which banks and bankers are suffering the most? No prizes for guessing…
ACUTE PAIN
1. Merrill Lynch
Share price: down 44% since January 2007.
Bonus per head*: $181.3k, down 25% on 2006.
Net profit for the first nine months of 2007: $1.9bn, down 61%.
Redundancies: none announced so far, but exit of chief exec Stan O’Neal is imminent.
2. Bear Stearns
Share price: down 38% since January 2007.
Bonus per head*: $407.6k, down 20% on 2006.
Net profit for the first nine months of 2007: $1.1bn, down 27%.
Redundancies: 300 firm-wide, including equity trading, 550 at US mortgage origination units, and Warren J. Spector, co-president.
VERY BAD PAIN
3. UBS
Share price: down 17% since January 2007.
Bonus per head*: –
Net profit for the first nine months of 2007: CHF64m (US$55.1m) at the investment bank, down 98.6% on 2006.
Redundancies: 1,500 in the investment bank before Christmas; Huw Jenkins, head of UBS investment bank, has already gone.
4. Bank of America
Share price: down 8% since January 2007.
Bonus per head*: –
Net profit for the first nine months of 2007: $3.3bn at the investment bank, down 39% on 2006.
Redundancies: 3,000 jobs to go in the global corporate and investment bank; Chris Hentemann, head of global structured products, and R. Eugene Taylor, head of investment banking, have already gone.
MODERATE PAIN
5. Lehman Brothers
Share price: down 18% since January 2007.
Bonus per head*: $254.7k, down 2% on 2006.
Net profit for the first nine months of 2007: $3.3bn at the investment bank, up 10% on 2006.
Redundancies: 1,200 from US mortgage unit.
6. Morgan Stanley
Share price: down 19% since January 2007.
Bonus per head*: $280k, down 8% on 2006.
Net profit for the first nine months of 2007: $6.8bn at the investment bank, up 28% on 2006.
Redundancies: 300 in institutional securities, 40 to 60 expected in London.
7. JPMorgan
Share price: down 2% since January 2007.
Bonus per head*: –
Net profit for the first nine months of 2007: $3bn, up 13% on 2006.
Redundancies: 10% of fixed income division, with pain expected to be worst in CDOs.
AND… NO PAIN AT ALL (OR SO IT WOULD HAVE US BELIEVE)
8. Goldman Sachs
Share price: up 21.5% since January 2007.
Bonus per head*: $565.7k, up 4% on last year.
Net profit for the first nine months of 2007: $8.4bn, up 31% on 2006.
Redundancies: none announced.
*based on compensation expenditure during the first three months of the year
It’s still better than working at McDonalds.
I have seen an increasing amount of articles on Goldmans producing such strong results despite the pain in the market. I was under the impression Goldmans were at the front of innovation and so would be up to their necks in CDO’s, ABS, MBS markets but they continue to surge forward. Maybe Goldmans credit risk management policy is far more advanced then the street but I sincerely hope there is not an accounting scandal on the horizon.
Goldman is in a major restatement of earnings. They’re gonna get stuck pretty good, but not as bad as Merrill and Bear Stearns. Who writes these articles anyhow? Seems a cursory perusal of the recent news would provide relevant and up-to-date information.
Bear in trouble?? Not as bad as people think…im recruiting for them left right and centre! not the sign of a bank in trouble…
Either GS is the only clever bank around, or it is the new Enron. There is no other way to explain this.
I have just been offered a job at Merrill Lynch. I am currently working for a Hedge Fund. Is it wise to move?
BofA are firing a lot of people – even analysts are not immune…The metals team in Europe has stopped trading and the credit strategy team has completely been fired.
If you’re at BofA unlucky…
Bear are hiring alright, but at the same time they are clueless in thier operations outside US especially Prime Brokerage.
I would be tempted to stay at the hedge fund, depending on how secure you feel that is. Does it appear to be financially sound? Do you see any likelihood of being made redundant there? If not, I would stay there until say mid-2008 and see if the credit problems have blown over by then. If so, and you want to move to an investment bank, then I would make the move then. Otherwise, I would stay at the hedge fund for now. Of course, if the financials at the hedge fund or your position there are looking shaky then it would probably be best to accept the offer at ML.
1- Goldman is just propping up its year end statement
the day of recokining will be upon them next year
2- Morgan actually had the nerve to take new starter
guaranteed CASH bonuses and declare it was going
to pay a portion in SHARES. That is not right ppl
the bank is trying to artificially prop up the price
of its shares by breaking its pay contract which
makes a very poor impression on the new prize
department head let me tell you