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Morning Coffee: Why Barclays investment bankers should thank Jes Staley. Deutsche Bank clawbacks activated

Jes Staley cuts Barclays investment bank

Message to Jes Staley

Another day, another announcement concerning the eradication of jobs in an investment bank. This time, it’s not Morgan Stanley and it’s not Credit Suisse. – It’s Barclays. The Financial Times reports that the house of Jes is cutting another 1,000 jobs from its investment bank, starting this Thursday.

Jes’s adjustment follows Antony’s excision. Antony Jenkins, Jes Staley’s predecessor as Barclays’ CEO promised 7,000 job cuts in the investment bank back in 2014. The FT says the latest cuts are being presented as a continuation of Jenkins’ policy, but are supplementary to it.

Like most banks, Barclays has a track record of cutting jobs before bonus day. This year, some bonuses at Barclays have reportedly been delayed until late March, giving the bank plenty of time to make changes after its strategy announcement on March 1st.

While the situation at the British bank is clearly bad for losing their job, Barclays investment bankers can at least console themselves with the thought that it could have been worse. The cost income ratio at Barclays’ investment bank is around 75% according to analysts at J.P. Morgan, up from 71% in 2012. Cuts need to happen and Staley is seemingly trying to make them as painlessly as possible: he’s cutting cash equities trading in Asia, trading desks in India, Taiwan and South Korea, and some jobs in continental Europe and Latin America. He’s not hacking at the fixed income division in London, or at investment bankers in New York.

Jes’s 1,000 new cuts amount to around 3% of staff at Barclays’ investment bank. He’s also being judicious with pay and cutting bonuses by just 10% according to Bloomberg. Jes is trying to be gentle. And Barclays investment bankers should thank him for that.

Separately, it seems highly likely that bonus clawbacks will now be activated at Deutsche Bank. Thanks to litigation charges, Deutsche said yesterday that it expects to report its first full year loss since 2008. That’s a shame: Deutsche claws back bonuses as they vest whenever it makes a loss at group level.

Meanwhile:

Tidjane Thiam denies he’s leaving Credit Suisse for the IMF.  (CNBC) 

Credit Suisse is still a primary dealer in Greek government bonds, despite announcing the closure of this business last October. (Ekathimerini)

Just 10% of Morgan Stanley staff are happy with their bonus payments for 2016, down from 47% last year. (Evening Standard)

Deutsche Bank was not allowed to sack an employee for alleged LIBOR rigging and must reinstate him immediately. (Reuters) 

Goldman Sachs wants Britain to stay in the EU so badly that it’s donated a six figure sum to the ‘yes’ campaign. (Telegraph) 

Goldman Sachs’ co-head of technology talks blockchain. (Goldman Sachs)  

Banks blame regulation for slashing returns from 25% to 5%. (WSJ)

Jamie Dimon looks on the bright side: “I’m hopeful that this is just all a big adjustment,” Dimon said. “A fast adjustment might be better than a painful, slow death.” (CNBC)

Citigroup associates are volunteering with local businesses in East Africa for four weeks. (The Tally)

Studying in a foreign country can encourage debauchery. (Bloomberg) 

Calculate the marginal cost of your friends. (Quartz) 

Become a butler and make $150k a year. (BBC) 

How to seem telepathic. (Marginal Revolution)

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