Large European and U.S. investment banks once considered emerging markets to be their own backyard, a place where they could easily elbow out local banks. Lately, they’re finding themselves defeated by smaller and nimbler regional players.
Emerging market fees paid to U.S. and European investment banks dropped to 43% in 2012, down from 69% in 2005, according to Bloomberg, citing a report from consulting firm Freeman & Co. Investment banks like Brazil’s BTG, Russia’s VTB Capital and China’s Citic Securities have developed better local knowledge and stronger networks, according to the report. They are adding to their teams while global banks are cutting staff.
Morgan Stanley, Citigroup, UBS, Credit Suisse and JPMorgan Chase are among those taking the biggest beatings from local competitors.
Citigroup Chief Executive Michael Corbat said in March that the firm will “significantly scale back or exit certain business lines” in 21 countries, choosing only to invest in its most efficient markets. While other global banks aren’t in pure cut-mode like Citi, you can certainly expect them to follow suit, albeit at a smaller scale.
If you want to work in emerging markets, it’s time to start appearing like a local.
Canadian investment banks including BMO Capital Markets, Canaccord and CIBC are gradually building out their teams in London as European rivals fade. Several Canadian boutiques are also hiring.
Meet Chris Arnade. He quit his prop trading job at Citigroup last July to pursue his photography project, “Faces of Addiction,” which documents the impoverished Hunts Point area of New York. He’s happy, but still itches for Wall Street.
The ratio of unemployed workers to job openings was just more than 3:1 in February, down from nearly 7:1 in 2009. Of course that was before the lackluster March jobs report.
There were plenty of job cuts on Wall Street during the first three months of 2013 – more than 20,000 by the six largest U.S. banks – but it’s not all bad news. Many of the cuts were in mortgage departments covering bad loans and foreclosures – temp jobs really. Firings should slow in the second half of the year.
As part of its ongoing management reorganization, Citigroup is scrapping two senior roles in its Institutional Clients Group, although no one will be let go.
KPMG has resigned from its role as auditor of Herbalife and Skechers after an unnamed partner reportedly leaked confidential client information to a third party.
Brevan Howard, Europe’s second-biggest hedge fund, continues to poach talent, both in the U.S. and at home. Its latest hire is Neilan Govender, a former senior currency and rates trader at Credit Suisse, who’s been named a senior portfolio manager in London.
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