Late Lunchtime Links: Now we know why Bank of America's M&A people have been getting twitchy. Its fixed income traders, however, have had an incredible quarter

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In Michael Corbat's dreams

In Michael Corbat's dreams

A few weeks' ago Christian Meissner at Bank of America started sounding a little defensive. The bank has the right M&A team in place, said Meissner, but it might be a while before the right team produces the goods. "M&A is a long-term relationship game," Meissner said, "it takes three to five years to build that.”

Today it becomes apparent was he was talking about. Last year Bank of America Merrill Lynch hired a lot of MDs in Europe - as many as 30 according to some sources. Does it have anything to show for that? No. The bank's third quarter results reveal that M&A advisory fees were down 30% year-on-year in the first nine months of 2012. This compares to a mere 3% decline at Goldman Sachs and a mere 4% decline at Citigroup over the same period. Meissner and the new MDs don't seem to be doing that well. Admittedly, JPMorgan's M&A revenues fell 26% over the past nine months - but JPMorgan hasn't ramped up its M&A cost base.

While Bank of America's M&A bankers may be justifying their existence, the same cannot be said of its fixed income bankers. In the third quarter, excluding DVA changes, they achieved a monumental 359% increase in revenues - far outweighing the performance of any rivals. This may have something to with the disaster that was 3Q last year in Bank of America's fixed income business, but it still looks pretty good. So far this year, FICC revenues at the bank are up 20% ex-DVA. Fixed income salespeople and traders may rank ahead of M&A bankers when it comes to payday.


Moody’s punishes Jefferies for all that hiring, downgrades it to one notch above junk. (Bloomberg)

Bank of America says it’s going to make 30,000 redundancies, but has made less than 3,000 so far (BusinessInsider)

Countrywide could still bring Bank of America down. (Bloomberg)

Pandit stands to forego a $33m exit package. (Bloomberg)

In 2010, Michael Corbat, the new Citi CEO indulged in Spartacus training, intended to “torch fat.” (Bloomberg)

Everything you need to know about the Spartacus workout. (Personal Trainer) 

Mr Havens said he had already been planning retirement from Citi at year-end but decided, in light of Mr Pandit’s resignation, to leave the company at this time. (Telegraph)

Earlier this year, John Havens stormed out of a board meeting at Citi. (WSJ)

Michael O’Neill, who became Citi’s chairman in March, is thought to be behind Pandit’s departure. O’Neill has a reputation as a big cost cutter. Pandit may have been resisting that. (WSJ)

Pandit's departure followed months of tension with Chairman Michael O'Neill over a range of issues, including compensation and the role of Chief Operating Officer John Havens. (Reuters)

Episodes that led the board to replace Pandit with Corbat included the rejection by regulators in March of a plan to boost shareholder payouts, the $2.9bn writedown on the Smith Barney brokerage unit and a two-level cut of its credit rating by Moody’s. (Bloomberg)

O’Neill has hailed Corbat as the man "to sharpen our focus on achieving strong, sustained operating performance". Sounds a lot like redundancies. (Guardian)

Citigroup's overall return on equity was 1%. (Breaking Views)  

Citigroup gives no indication of the ROE in its investment bank. (DealBook)

Pandit earned $221.5m over his five years at Citi. (WSJ)

Corbat will get a $1.5m salary. Pandit was on $1.67m in 2011. (Bloomberg)

Pandit could join hedge fund Portman Square Capital. It is a revived version of Old Lane, the hedge fund group he founded and sold to Citi. Portman is due to start trading next month and is run by Sutesh Sharma, a friend of Pandit’s and former colleague from Morgan Stanley. (Telegraph)

If Goldman suddenly starts paying less, then it suddenly stops being Goldman Sachs, and becomes something closer to JP Morgan or UBS or Morgan Stanley. (William Wright)

Trading revenues at Goldman were a bit disappointing compared to JPMorgan and Citi. (Bloomberg)

Goldman interns had to attend 6am bootcamps, says Greg Smith. (Telegraph)

Eladian Partners, a high frequency trading company with 50 employees, including some in London, has closed down. (Dealbook) 

Banks must purge their tainted staff, suggests the City minister. (FT)

RBS has ditched the government's asset insurance scheme but a shareholder action group is now ready to file a £4bn lawsuit against RBS, Fred Goodwin, ex-chairman Sir Tom McKillop and ex-investment banking head Johnny Cameron. (Daily Mail) 

SocGen’s ex-head of fixed income says he was fired because he was so good that the bank just couldn’t afford him. (Evening Standard)