Equities sales and trading businesses had a good year in 2013. Bank of America, for example, managed to increase its equities sales and trading revenues by nearly 30%. Anyone might think equities staff will be rewarded for their good fortune. But no. Yann Gerardin, head of global equities and commodity derivatives at BNP Paribas has declared that equities success - in Europe at least - is illusory.
When the cost of capital is taking into consideration, most European equities businesses are actually losing money, Geradin told Bloomberg. “A lot of banks are running unprofitable equity businesses, which cannot be sustainable,” he said. It is not clear whether BNP Paribas is among them, but the lack of profit may help explain why banks like Credit Suisse have been trimming equities staff, despite the healthy environment for revenues.
Separately, much fuss has been made about Gerrit Zalm, a former Dutch finance minister turned chairman of ABN AMRO.
On a normal day, Zalm looks like this:
More recently, however, Zalm has been dressing like this:
Zalm hasn't taken a lead from comedian Barry Humphries or transvestite potter Grayson Perry and developed a female alter ego, but has been dressing as a 'brothel madam' called Priscilla to deliver employee-discussions on banking culture and customer service. Priscilla informed ABN employees that banks can learn a lot from brothels, where she said customer service is about being, "trusted, professional and ambitious.” A spokesman for ABN AMRO said Zalm's method of delivery fitted the Dutch sense of humour. It seemed popular with employees who hooted with delight at Zalm's speech. U.S. banking CEOs who want to adopt a similar format for town halls can watch the full video of Zalm-as-Priscilla by clicking here.
David Cameron says he’ll veto any attempts to increase pay at RBS. (Bloomberg)
Vince Cable wants RBS to pay like Handelsbanken, which pays no bonuses at all. (Guardian)
Bank of England Governor and ex-Goldman banker Mark Carney says he disapproves of Labour’s plan for a ‘crude bonus cap.’ (Financial Times)
A reminder that RBS bankers are comparatively poorly paid. (William Wright via Twitter)
Nomura has hired from RBC for its European rates business. (Bloomberg)
Deutsche Bank has suspended one New York based trader who deals in Argentian pesos, after allegedly finding emails that indicated attempts to manipulate benchmark foreign exchange rates. (IB Times)
Amazing LIBOR interactive infographic from the WSJ. Who knew who, who did what (WSJ).
Head of the Swiss financial regulator is being replaced by his deputy who was head of Japanese Securities at UBS in Japan at the height of the bank’s LIBOR manipulation. (Financial Times)
US investigators have been at Citi in London as part of an FX rigging investigation. (Reuters)
An extreme case of banker burnout. (Business Insider)
The real issue with bankers’ working hours is that senior bankers are dreadful managers. (Reuters)
"Your friendships deteriorate and your boyfriend or girlfriend is angry because they have not had a meal with you for a month. You lose touch with your family. It’s miserable.” (Financial Times)
Hector Sants is being headhunted by the Archbishop of Canterbury. (Telegraph)
Private bankers love a little bit of short term volatility like a chubby child loves cake. (BankersUmbrella)