All the emphasis so far has been on cuts in equities and M&A, but as Ben Wright at Financial News points out today, RBS is almost certainly going to have to make some big cuts in its fixed income businesses too.
Wright doesn’t offer any numbers. However, our own research suggests that the cuts could be very substantial.
Sources who’ve seen the teaser document being circulated by Lazard in its effort to sell RBS’s equities business in the next five weeks, claim it says RBS employs 1,400 people globally in its equities business. Reuters, meanwhile, suggests there are 220 people working in RBS’s EMEA M&A team.
This leaves an additional 1,880 cuts to be made globally if RBS is to reduce headcount by 3,500 as mooted last week. Some of these cuts are likely to come at RBS Greenwich Capital, which focuses on treasury services and securitization. Others may come from pulling out of Spain, Italy and the Nordic region, as suggested by the Financial Times.
However, it seems difficult to conceive precisely how RBS will achieve its 3,500 headcount cuts, plus the 2,000 redundancies declared late last year without cutting heavily into the fixed income business too.
This could be construed as a shame. As the chart below from research firm Tricumen shows, RBS’s fixed income businesses are pretty good. Seb Walker, partner at Tricumen says some of the proposed redundancies might come from merger of the RBS debt origination teams with its global transaction services business: “I’d imagine both would have coverage staff that could be merged, not to mention various finance, and support staff,” he says.
And in other (related) news:
John McIntyre is spearheading plans to spin off RBS’s corporate finance business as a Pan-European boutique. (Financial Times)
The 3,500 affected employees won’t be put on redundancy notice until RBS concludes it can’t find a home for them elsewhere, said two of the executives, who declined to be identified. (Bloomberg)
Legally, Salmond’s case for arguing that RBS is England’s problem looks threadbare. (Financial Times)
Mr Diamond is believed to have left the Business Secretary under no mistake that Barclays will continue to remunerate its senior staff as it sees fit. (Telegraph)
Citigroup has poached four energy brokers from BNP Paribas for its London team. (Bloomberg)
Thames River has strengthened its global credit team with the recruitment of Brett Golledge, the former head of credit trading at UBS. (Citywire)
Australian banks may scrap 7,000 jobs in the next two years, according to UBS. (Bloomberg)
HSBC wants to do most of its hiring in Asia. (Bloomberg)
UBS has promoted its former head of Middle East investment banking to become its head of EMEA investment banking. (Bloomberg)
BofA conducted an assessment on Brian Moynihan which concluded that he failed to communicate effectively, didn’t include enough people in decisions, tended to micromanage and surrounded himself with people who weren’t experienced enough, according to people familiar with the report. (Wall Street Journal)
Bank of America has a chief image officer. (Reformed Broker)
JPMorgan’s investment bank performed far worse than its retail bank and consumer lending businesses in the last quarter. (CNBC)
“There’s no part of the investment bank that is naturally stable,” said Mr Dimon. “It’s not a mystical thing – it will come back. I don’t think that the lower numbers are permanent. When things come back [it] will boom again. And it won’t be because we’re geniuses. It will be because we stayed in the game.” (Financial Times)
Aon Corp, the world’s largest insurance broker, announced today that it is moving its corporate headquarters from Chicago to London. (Global Post)
Around 3,000 bankers were sacked or suspended by the FSA in 2011, vs. 2,181 in 2010 and only 1,027 in 2008. (Telegraph)
Last year, 27-year-old Topes Calland, an Oxford history graduate was offered £10k for 10 hours of tuition to help a member of an Asian royal family get into Oxford. (Sunday Times)