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Morning Coffee: The new top banking job you’ve never thought of. Redundancies everywhere

strategy investment bank

Banks need people to set them on the right course

If you’ve been keeping up to date with investment banks’ second quarter results, you might be wishing you were working in M&A, or maybe rates and FX or equities trading. These are the fiery finance jobs of 2015. But they are due to be outclassed by another finance-related job which wields all the power at this point in the cost-cutting cycle: the strategist. Right now, it’s the banking strategist who is in ascendant. – By which we mean the person who can devise and implement a strategy for the entire bank, rather than the product strategists who advise on investments.

You might think this kind of strategizing would be the work of the CEO, but you’d be all wrong. CEOs can’t devise and implement strategy alone – they need professional help. Hence, John McFarlane at Barclays is hiring a ‘strategy and transformation czar’ even before he appoints a new CEO. The czar in question will reportedly ‘accelerate cost cutting’ at the bank and act as an ‘enforcer.’ Deutsche Bank hired Sam Wisnia to do a similar job last January. BNP Paribas, meanwhile, has turned to external consultants for strategic counsel: Boston Consulting Group and Oliver Wyman are reportedly working on a report titled ‘the CIB of tomorrow’ which will bring the deepest (job) cuts at the French investment bank since the financial crisis.

Separately, the rise of the strategist is closely correlated with the return of redundancies. BNP isn’t the only bank about to slice away entire teams of investment bank staff. Barclays has reportedly begun cutting 150 people from its investment bank, managing directors included. After making an average of 100 of its investment bank staff redundant during every month over the past year, RBS said last week that its investment bank will be nearly insignificant by 2017. And Deutsche Bank, despite not offering many new strategic pointers during last week’s call, is already closing overseas operations in Malta, Finland, Norway, Denmark, New Zealand and Peru. We’re not even in redundancy season yet; things are likely to get worse.

Meanwhile:

McFarlane says the big universal banks now are all American: “They have the scale that we no longer have to be global so we are going to have to focus.” (Financial Times)

John Cryan says he’ll be doing more than cutting costs ‘horizontally’ at Deutsche Bank – he’ll be taking out entire businesses and product lines. (Seeking Alpha)

George Osborne is about to start selling RBS. (Sunday Times)

SocGen is cutting headcount in New York. (Bloomberg)  

Arxis Capital, the market making firm formed last year by former Bank of America Corp employees and ex-Knight Capital chief Thomas Joyce, hired Jay Dweck as chief technology officer and head of rates and currency trading. Dweck was previously an MD at Morgan Stanley. (Reuters)  

Ex-J.P. Morgan bankers are doing MBAs at the likes of Wharton and spending their summer interning in Silicon Valley. (Poets and quants) 

Kevin Whyman, head of European asset-backed-securities sales at Credit Suisse, died at Chris Evans’ Car Fest at the weekend. (Bloomberg) 

Hedge funds domiciled in the Cayman Islands, the US, Hong Kong and Singapore might not be able to sell their funds across Europe following a ruling by a European regulator. (Financial Times)  

Why you don’t want to work for another investment bank: Deutsche Bank, Morgan Stanley and ABN Amro itself will be paid a combined maximum fee of €4.5m for their role in ABN Amro’s partial flotation later this year. (DutchNews) 

Weird statues depicting bankers as black rats have appeared in London.(Business Insider) 

Why Lloyd Blankfein wouldn’t like to be a politician: “I think it would be an attractive thing to do but a very unattractive place to get to.” (Bloomberg) 

(Photo credit: Bob Marquart)


 

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