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Morning Coffee: Bankers living in fear of job losses and bonus cuts. Ominous noises from Deutsche

Approaching bonuses with trepidation

Approaching bonuses with trepidation

The path to this year’s bonuses seems unusually strewn with the bodies of bankers who’ve left pre-pay day. UBS,  J.P. Morgan, Citi and Deutsche have all contributed to the cadavers. Now it seems that BNP Paribas will be adding a few people of its own.

Les Echos reported yesterday that the French bank is preparing a new round of job cuts in its corporate and investment bank A union representative from the French bank said there will probably be fewer cuts than in the last cull in 2011, in which 373 people were removed. It’s not clear when BNP’s extractions will take place, but sometime before bonuses are paid in late February seems likely. – Not that BNP’s bonuses will necessarily be worth waiting: Les Echos also reported that the ‘best paid bankers’ who are still employed at BNP’s CIB after their colleagues have been ejected will have their bonuses trimmed by 50%.

Who will BNP let go? Fixed income sales and trading professionals are a clear target (some have been preemptively quitting anyway). US staff may also find themselves targeted, again. In 2013, BNP announced a three year hiring plan in Asia, with the aim of adding 1,300 staff by 2016. Will those jobs be ringfenced? Maybe not.

Separately, Anshu Jain says the ECB’s quantitative easing strategy might not be such a good thing after all. QE in the eurozone will be of “profound importance for banks operating in Europe,” says Jain. – And not in a good way. He predicts that the low interest rates and destruction of net interest margins that result from QE will be a “huge challenge.” Most pertinently, Jain says “the flow franchise businesses will all suffer” as a result. That sounds ominous for Deutsche’s big flow fixed income and equities trading businesses, particularly as Jain adds that banks will need to “adjust all aspects of their business model” to adapt to the new environment. It’s worth noting, however, that US bond traders benefited substantially from quantitative easing in the US, so maybe Jain is being unnecessarily pessimistic.

Meanwhile:

Richard Jackson, European head of flow rates trading at Deutsche Bank, has mysteriously disappeared. (Financial News) 

Ex-Brevan Howard trader who earned $900m in 10 years of work at the fund, settles dispute with his previous employer extremely amicably. (Financial Times)

Peter Von Maydell, a currency trader at BlueCrest,  had his fund closed after losses on the Swiss Franc. Von Maydell joined BlueCrest from Credit Suisse two years ago. (Bloomberg)

Two other traders (Peter McGarry and Luke Halestrap) have also left BlueCrest. (Bloomberg) 

J.P. Morgan just set up a new 12 person unit to trade credit index products. (WSJ)

Nomura is hiring investment bankers in Asia and the US, again. (Bloomberg) 

Female hedge fund manager Nehal Chopra achieved 46% returns last year, but still hasn’t attracted many investors. (Forbes) 

How the CFA Charter helped me find a job. (300 Hours)


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