From now on, everyone at Barclays must adhere to a strict moral code forbidding any manifestation of objectionable behaviour. It may be fortunate, therefore, that Paul Idzik, Barclays’ former chief operating officer, moved on long ago. Idzik was COO at Barclays until 2008 and is apparently about to be named the chief executive of Wall Street brokerage E* Trade Financial. In his former incarnation at Barclays, Sky News says Idzik was known for his unusual management style: on one notable occasion, he snapped an employee’s pen in half simply because it didn’t have Barclays’ name on it.
Separately, Morgan Stanley’s results are out. They’re not especially good news for Morgan Stanley’s investment bankers. Compensation expenditure in the investment bank was down 8% in 2012 versus 2011. Nevertheless, Morgan Stanley still appears to be substantially over-spending on pay: 63% of net revenues in its institutional securities unit were devoted to compensation in 2012, up from 42% in 2011. Things look a little better at Morgan Stanley when revenues are adjusted for DVA, but 44% of revenues still went on compensation last year. This makes Morgan Stanley an outlier: at Goldman Sachs only 38% of revenues were spent on compensation last year, at JPMorgan 35%, and at BAML 40%. The banks’ shareholders may yet have something to say about this.
Nor are today’s results particularly good news for Morgan Stanley’s fixed income salespeople and traders: revenues in the bank’s fixed income business were down nearly 70% last year versus 2011. At Goldman Sachs, fixed income revenues were up 10% for 2012.
As feared, Barclays is thinking of recouping its Libor fine from the investment banking bonus pool. (Financial Times)
Barclays only cut 10% of its workforce next month. (NY Post)
Fixed income trading was weak at Bank of America. (Financial Times)
BBVA is eliminating jobs in New York, transferring them to Houston. (Bloomberg)
A $1.3bn legal bill caused tremors at Citigroup. (Financial Times)
Goldman still makes 50% of its revenues from trading. (CNBC)
Banks have been shopping the Financial Times around for £1bn. (Telegraph)
BNP Paribas plans to spend one billion euros ($1.34 billion) over three years to reorganise and simplify its businesses. (Reuters)
Penguins seen at Blackstone. (Dealbook)