In 48 hours’ time, bankers in RBS’s GBM division should know their fates. Bloomberg reports that Stephen Hester had planned to string out the announcement until the end of this month, but that his hand has been forced by, “uncertainty in the ranks.”
Who will go? Almost certainly everyone in cash equities, but quite possibly – according to Bloomberg, everyone in corporate broking and M&A too. The BBC’s Robert Peston has an opinion on this: “RBS's strengths are in bond trading, foreign exchange, cash management for big companies, and advising companies on debt. And it's staying in all of that - although the balance sheet of its so-called Global Banking and Markets division will be shrunk and made to work harder,” he says.
Reassuringly, Peston also thinks that London may come off comparatively likely from all of the redundancies. “Much of the pain [at RBS] will be in Asia and North America. There will be an impact on employment in London, but perhaps less than some would expect,” he suggests. With more than half of RBS’s GBM employees in and around its office in Bishopsgate, this may prove wishful thinking however.
Separately, bankers who do lose their jobs at RBS and elsewhere could contemplate their choice of career. The Times today has a long interview with a damaged banker and his personal addiction counsellor, which touches upon the personality types who are attracted to the City, but should really avoid it. The banker claims he suffered, “childhood feelings of insecurity,” which meant he had a “deep feeling that everything was going to be taken away,” something he apparently reacted to by becoming a “master manipulator” and taking everything offered before it could be removed.
“I ended up at the top of a City financial institution, travelling the world, fuelled by a huge salary and 200% bonuses. My behaviour was outrageous — no one could tell me I was wrong,” he informs The Times, adding: “If you have any identification with me as a boy — if you crave approval and see outward validation — the City is to be avoided at all costs. It takes away the pain, fear and insecurity of early life. But at the time to pay, the piper will come when you’re least capable of paying.”
The banker in question overcame his resulting problems and addictions with the assistance of Richard Kingdon, founder of City Beacon, a counseling service, which provides 24-hour a day help to financial services professionals with addiction issues. If necessary, Kingdon will go away with his clients for 10 days or so while they dry out. “You’re not going to be missed at work, are you, if you go away for a week or so? Whereas you go away for two months to rehab, that’s pretty on top, ain’t it?,” he says.
A former Goldman Sachs trader might buy Hoare Govett. (Sky)
RBS is determined to pay John Hourican his £4m bonus. (Financial Times)
KBW opened its UK equities market-making business in June last year, and has now closed it again. (Financial News)
UK M&A deals are at their lowest level since 2001. (Financial Times)
Houlihan Lokey is expanding its M&A practice. (Wall Street Journal)
Closing investment banks is easier said than done. One banker likens them to nuclear plants – the toxic waste has to be managed by expensive staff. (Breaking Views)
“I don’t take the view that investment banking is finished,” says Philip Augar. “It will be less profitable and smaller for a period and it will be quite a while before we see so many would-be global banks trying to gain a seat at the top table. But not that long. Five years?” (Financial Times)
Bank of America-Merrill Lynch is cutting 15 out of 75 of its managing directors across itsAsiainvestment banking division. (Reuters)
Hays’ UK business declines 7% as finance director says clients aren’t hiring and people aren’t leaving. (Evening Standard)
Credit Suisse closed its toxic bonus scheme (the Expanded Partner Asset Facility) on December 31st, but only after its own staff had put an additional $450m of their own money into buying additional toxic assets. (Bloomberg)
Rohit Chugh entered the food business after honing his skills as a pan-European equities trader at Goldman Sachs inLondon. Before that, he was an accountant at Pricewaterhouse Coopers. (Bloomberg)
Each Goldman partner is still expected to take home at least $3 million; in previous years, payouts twice that amount were considered common. (Dealbook)
Jeremy Clarkson made £2.1m from Top Gear last year. (Telegraph)
Forget banker bashing, civil servants are the 1%-ers. (Fintag)