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Morning Coffee: Credit Suisse’s investment bank dissection, BAML’s plan to change career paths

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No one likes to be pigeon-holed, but once you join an investment bank, rotate around a few departments and then settle in one division, this tends to be your niche. Exit options are rarely internal and instead bankers are courted by private equity firms or corporates and traders to hedge funds.

Bank of America Merrill Lynch’s new co-head of investment banking wants to change this. In an interview with Financial News, Karim Assef points out that his co-head Diego De Giorgi has been building the bank’s European operation, but one of the key focuses of the new regime will be on looking at what they already have.

I think what the organisational change allows us to do is facilitate the movement of talent,” he said. “It is having that mindset of where the opportunities are going to be, rather than people being locked into their historical areas of expertise.”

In other words, the first course of action will not be to fire people if their business area shrinks, but ensure that there are opportunities for “talent” elsewhere. Not surprisingly, this will require a cultural change.

Separately, in an ominous note shortly before its first quarter results, Deutsche Bank analysts suggest that new Credit Suisse CEO Tijane Thiam might like to sell a few parts of its investment bank. Government debt, foreign exchange and securitisation could all be on the chopping block, they suggest.

Meanwhile:

Former Citigroup trader throws in towel at new hedge fund after oil price crash: “I’m the first to say: I can’t do it. I just don’t think in this environment I can have a portfolio that mirrors what was done in the past.” (Wall Street Journal)

Goldman’s FICC commitment is likely to be rewarded this quarter – revenues could be up 7% and its share of the fixed income revenues in four years (Bloomberg)

Investment banks still need to shrink, but cutting 2% from expenses every year should be enough. (Breaking Views)

Investors still have a distaste for investment banks (Wall Street Journal)

Citi is shaking up the senior ranks in risk and compliance (Financial Times)

Jamie Dimon says that legal costs are normalising, and that buying Bear Stearns was not a good move (New York Post)

Perella Weinberg executives have “interviewed individuals and entire teams of bankers that specialise in corporate bankruptcy and out-of-court debt restructurings” and will hire in the next few months, following departures last year. (Wall Street Journal)

 

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