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Lunchtime Links: Banks’ unprofitable expansion in Asia; the MBA with the 434k hedge fund starting salary

We’ve suggested before that all this expansion in Asia might not be good for banks’ bottom lines. Now RBS has confirmed our suspicions – for wealth management at least.

The bank has declared its intention of adding relationship managers to the 550 people it employs in Singapore, Hong Kong and India next year – even though its Asian wealth management business is only, “slightly profitable.” With wealth in Asia expected to increase at 12% p.a. over the next five years, expansion on the continent is about positioning for the future rather than immediate profitability. The danger is that margin compression in the short term leads to cost savings and compensation reductions elsewhere (AKA Europe).

Separately, it seems MBAs from top US business schools can still pay. An MBA graduate from Stanford Business School has apparently elicited $675k (434k) from a US hedge fund this year. This is not the norm: the median starting salary for Stanford MBAs going to hedge funds is $150k. At LBS, median compensation (including signing bonus, salary and end of year bonus) for MBAS going into financial services last year was 114k.

Man who joined Standard Chartered from Lehman in 2008, as global head of fixed income, has left. (Bloomberg)

Carnegie Investment Bank in Sweden is cutting 100 jobs. (Bloomberg)

Barclays will spin off its capital arbitrage team, led by Philip Rosenstrach, as a hedge fund on Jan. 1. The fund will be called Pomelo Capital and be based in New York. (Bloomberg)

There are many parts of the economy outside of finance where middlemen provide their valuable services without being labeled parasites by the bitter, ignorant, and self-righteous. (Bloomberg)

Nick Clegg to accuse banks of racism. (Guardian)

Stephen Hester says banks are seen as a dumb investment. (Guardian)

Société Générale has initiated legal proceedings against Associated Newspapers following a Mail on Sunday article which incorrectly claimed that the bank was on the “brink of disaster” and in “a perilous state.” (Financial Times)

By afternoon, the German paper yielded 24 basis points more than comparable U.S. debt. (Breaking Views)

Lest we forget: the UK is the nation with the greatest combined debt (government, corporate and household) in the world. (Zerohedge)

“Britain cannot have it both ways, demanding more opt-outs and now special favours for the City at the same time as insisting it must help to make the rules in the euro club,” a senior French official said. (TheTimes)

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