Late Lunchtime Links: Morgan Stanley too small to compete in fixed income. Silent cull at RBS

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Still squeezed at Morgan Stanley

Squeezed, again

Things are not actually looking too good for Morgan Stanley's fixed income professionals. While the US bank's so-called 'top line' results didn't look too bad yesterday, with fixed income sales and trading revenues seemingly rising by 12% year-on-year, the situation was far worse when figures were adjusted for accounting charges: Morgan Stanley's fixed income sales and trading revenues actually fell by 40% compared to the first quarter of 2012.

The Wall Street Journal said Morgan Stanley now needs to convince investors that it isn't too small to compete. This is particularly the case in fixed income, where by Morgan Stanley's own reckoning banks need to have scale to survive. As the chart from Bernstein Research below shows, Morgan Stanley is fast losing share in fixed income sales and trading. In yesterday's conference call, Morgan Stanley CFO Ruth Porat said the bank was still aiming for an 2% increase in market share in fixed income sales and trading. The opposite seems to be happening instead. If this continues, more fixed income redundancies at Morgan Stanley look inevitable.

First quarter 2013 FICC revenue growth vs twelve month trailing average

Morgan Stanley FICC decline

Separately, people are leaving Royal Bank of Scotland. Financial News reports that Giles Turner, the global head of sales at RBS has stepped down. This follows the resignation of Brian Reid, a member of the executive team in RBS's international banking and markets division. Last week, Mark Barnes global head of macro client trading and FX options also left the bank.


Geoffrey Dennis, global markets equity strategist at Citigroup, has left the bank. (Bloomberg) 

Morgan Stanley is still cost cutting, has yet to reach its $1.6bn cost cutting target. (Seeking Alpha)

Is Citigroup the new golden child of Wall Street? (Euromoney)

Mr Bommensath’s elevation actually perpetuates the Bob Diamond legacy – he was one of Mr Diamond’s original core recruits in 1997. (Financial Times)

Rich Ricci flies by private jet to Dublin most weekends. (Daily Mail) 

A top trader from Bear Stearns once showed me a cocaine dispenser he had built from a retractable ballpoint pen. (CNBC) 

High extraverted sales people perform poorly. (Occupational Digest)