Painful staff cuts, but pay's the same at RBS. Knight Capital had been a big hirer in London this year

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There's a fire raging at Knight Capital

RBS's results are out this morning. Its markets business hasn't done that badly - profits and revenues are predictably down, but it managed a very respectable 14% return on equity and a cost income ratio of only 59% - making RBS the best in class from a cost control perspective.

Painfully, RBS cut 700 people from its markets business between March and June 2012, most of them equities and corporate finance professionals. Less painfully, and despite a lot of talk about cutting variable pay, compensation appears to be holding steady: pay per head at RBS markets averaged £77k in the first half of 2012 - exactly the same as in the first half of 2011.

The really depressing thing about Knight Capital 

Meanwhile, some of those who've left RBS in the past year appear to have gone from the frying pan to the fire.

Following a trading loss estimated at $440m when its computers went crazy and started spewing orders earlier this week, Knight Capital is said to be on the brink of bankruptcy and to be seeking a buyer.

This is a particular shame when you consider that Knight Capital has been one of the hirers in London this year - and has rehoused several people from RBS.

The FSA register shows that Knight has added 19 new registered employees in London in 2012. At least 4 were from RBS, including Thomas Granger, Conrad Lee, Eoghan O'Neill and Adam Snelgrove.It's also hired from MF Global. As the chart below from research firm IMAS shows, Knight appeared to get rid of a few people in June/July last year, and had been slowly building ever since.

Evolution of FSA registered persons at Knight Capital 

 Source: IMAS

At this juncture, Knight staff can only hope that everything turns out ok. Failing that, they could always try places like Liberum Capital - which is advertising for an operations clerk and says it's always open to hearing from talented individuals.