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Morning Coffee: Why another big round of banking job cuts could be coming soon. The most interesting job at Goldman Sachs

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If you work for Barclays or RBS, you might be a little fearful that your job will disappear in the months to come. If you work elsewhere, you might be feeling more sanguine. That sanguineness could be misplaced – especially if you’re in Europe.

Bloomberg reports that Europe’s investment bankers have just had the worst January for a decade. Investment banking division (IBD) revenues from arranging mergers, syndicated loans and IPOs and debt offerings fell 22% to $1.5bn, the worst they’ve been since January 2004. The decline comes as banks were hoping for signs of a recovery. Chirantan Barua, an analyst at Sanford C. Bernstein in London said banks are still 20% overstaffed in Europe and that (like Barclays) they need to start dumping expensive senior staff soon.

“There is 20 percent overcapacity in the market,” said Barua. “You don’t solve the compensation problem by firing vice presidents. You need to do managing directors and partners.” Bloomberg notes that none of the five largest U.S. banks has announced any redundancies in their IBD and sales and trading divisions in the past six months. Unless IBD recovers soon, banks will be pushed to cut costs again. It doesn’t help that fixed income sales and trading revenues remain subdued everywhere.

Separately, Tracy Alloway, the U.S. financial correspondent at the Financial Times, came across an interesting job at Goldman Sachs. Goldman is hiring an ‘executive compensation analyst’ based in New York, pointed out Alloway on Twitter. The compensation analyst’s responsibility will include: ‘advising on structure of senior executive compensation programs and general plan design.’ In other words, working out how much Lloyd Blankfein and Gary Cohn should be paid. Strong communication skills are mandatory.

Meanwhile:

Deutsche has appointed Rich Herman global co-head of fixed income based in the US ahead of a push to increase its US FICC market share. (Financial Times)

When the legacy bank is factored in, UBS wasn’t so profitable after all. (Twitter) 

Sergio Ermotti has said UBS is looking at paying fixed allowances to sidestep the bonus cap. (Wall Street Journal)  

Ermotti said UBS had fallen behind on pay in recent  years, but that gap has now been closed. (Reuters) 

Employees in UBS’s ‘corporate centre’ are now the best paid. (FiNews)  

UBS has now been hit with “several” potential class action lawsuits related to its foreign exchange business. (WSJ) 

Ermotti will be tempted to go for growth in the US. That would be wrong. (Breaking Views)

Lloyds has suspended Martin Chantree, a senior currency trader. (WSJ)

The FCA says FX fixing allegations are every bit as bad as LIBOR. (Financial Times) 

The head of compliance at a multinational financial services firm in Hong Kong could earn between HK$1.1million and HK$1.7million (£86,000 and £ 132,000) a year. (Financial News)

Stephen Hester has found a new role leading insurance firm RSA on a salary of £950k, which could be tripled when bonuses are added. (Financial Times) 

How to write a cover letter. (HBR)

A map visualising how the tube strike will affect your commute. (Twitter)

 

 

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