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Equity derivatives woes bad for jobs and bonuses at French banks

Equity derivatives professionals had a wobbly time last month. Financial News points out that rising volatility and correlation exacted a toll on equity derivatives desks at BNP Paribas, Deutsche Bank and Natixis. Each made losses as high as €300m ($382m), while Caisse d’Epargne lost €600m. Future losses are expected at the likes of Credit Agricole and Credit Suisse.

It doesn’t bode particularly well for equity derivatives jobs, equity derivatives bonuses, or for bonuses at French banks like SocGen and BNP Paribas, which derive a high proportion of investment banking revenues from their equity derivatives businesses.

Cuts have been made already: Natixis and Calyon have both said they will close their exotic equity derivatives operations and headhunters say equity derivatives teams are smaller than they used to be.

“There have already been some cuts in equity derivatives, but they’re not nearly as visible as in fixed income,” says Jason Kennedy, CEO London at Kennedy Associates. “There will definitely be more people let go on the structuring side in future.”

Simon Maughan, a banking analyst at MF Global Securities, says French banks look overstaffed across the board. “Both BNP Paribas and SocGen are still operating as if markets will return fairly quickly, and they won’t,” he says.

Comments (2)

  1. SocGen is still hiring!

  2. need to distinguish flow and exo. flow desks might still be hiring (very limited) but it will be a bloodbath in exotics. structured sales have started to loose their jobs and stucturers will be next. EQD accounts for 25% of revenues at BNP and 33% at SG but BNP is strong in French M&A deals while SG has only EQD + retail. SG is certainly not hiring TraderJ – they are talking to people but cannot get contracts out (Paris blocking everything at the moment) … BNP and SG hope they can dominate the institutional space next year but retail and PB is dead and regulators might make their life even more difficult. absolute bloodbath at DB as well at the moment.

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