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BNP Paribas rescues senior fixed income trader from Morgan Stanley

Plucked out by a European bank

Plucked out by a European bank

Simon Birch, a senior FX trader at Morgan Stanley, is understood to have joined BNP Paribas in a senior EMEA fixed income trading role. A colleague of Birch’s confirmed his departure of Morgan Stanley. However, a spokesperson from the French bank was not available to confirm the move.

Birch’s departure follows a change of strategy at Morgan Stanley, which had been aiming to increase revenues in its fixed income currencies and commodities (FICC) business, but is now focused on increasing returns and reducing capital allocated to the area instead. Morgan Stanley is also rumoured to have paid some disappointing bonuses to its fixed income traders for 2013, but insiders said Birch is leaving the bank for a promotion rather than out of disgruntlement with his pay.

BNP’s hire comes after a difficult start to the year for banks’ fixed income businesses, which are thought to have seen revenues fall around 20% compared to 2013. FX businesses have been particularly badly hit according to analysts at Morgan Stanley, who claim revenues in the area were down 30% in the first quarter.   The FX market has been further buffeted by suspensions and investigations related to FX rate fixing. There is no implication that Birch, who spent time at JPMorgan, Barclays and Merrill Lynch before joining Morgan Stanley in 2011, has anything to do with the ongoing investigations.

Earlier this week, Jean-Laurent Bonnafé, chief executive BNP Paribas, told the Financial Times that pay for investment bankers will fall as margins in the industry are squeezed, and that BNP is a sensible and moderate payer. Speaking off the record, headhunters say BNP pays its senior producers very well, however. “It’s only the mid-ranking people who struggle to get paid in French banks,” said one.

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