We may be in a twilight time for European banks, which are busy hoarding all the liquidity they can from the European Central Bank, but this week’s assortment of US bank results have suggested that the big American houses are ok: they are seizing European banks’ market share.
David Viniar declared this week that Goldman’s starting to see a little less competition: “From a competitive position, it actually feels quite good.”
Yesterday James Gorman and Ruth Porat at Morgan Stanley said much the same. “As we look at it, in 2008 European banks took share from US Banks,” said Porat. “That's obviously when the US was going through its capital focus and liquidity raise. And given that European banks are now going through similar issues…we do see this as an opportunity to gain share.”
Gorman reiterated this: “In any industry restructuring, as the players between the 10-20% range exit, clearly that share is going to flow to those at the top….I do think there's a longer-term change in industry structure that should play to our advantage,” he said.
Who are the ‘10-20%’ players who are exiting? Think the French banks, about whose redundancies Bloomberg has a produced long and detailed article today. Notably, Goldman COO Gary Cohn told the Telegraph at the weekend that he thinks Sarkozy wants SocGen and BNP to get out of equity derivatives. Even if Sarkozy doesn’t, it suggests Cohn is alert to the potential for Goldman to take over where BNP and SocGen leave off.
But would European bank employees really want to work for US investment banks? Maybe not. At the risk of stereotyping, US banks have traditionally been more cutthroat, faster-paced environments with longer hours and less tolerance for lunch breaks. There could be some cultural issues to overcome.
RBS, which is 83% owned by the taxpayer, took advantage of the ECB long-term refinancing operation (LTRO) scheme to borrow £5bn of the £20bn of wholesale funding it needs to replace this year. (Telegraph)
Just as it makes redundancies, SocGen’s architects are putting finishing touches on a spanking new, highway-straddling building in La Defense, designed to house more than 3,000 markets employees. (Bloomberg)
Commerzbank has realized it can raise new capital by paying its employees in its own shares. (eFinancialCareers Germany)
Bank of America might replace non-deferred cash bonuses with share awards to improve its capital position. It is considering issuing $1 billion of new shares for the payouts. Staff, including those based in London, will still have the choice of immediately selling those shares for cash. (The Times)
There has been crying as bonuses were handed out at Goldman Sachs. (CNBC)
Morgan Stanley is reducing pay for senior investment bankers and traders by an average of 20-30% at executive director level and above. (Bloomberg)
Credit Suisse employees who got $5.05bn of junk-grade loans and commercial-mortgage-backed bonds in late 2008 as part of annual bonuses have reaped gains of 75% on the payouts since the end of that year through Nov. 30, said people. (Bloomberg)
JPMorgan sharply boosted commodity risk in the fourth quarter. No one else did. (Reuters)
“Trading was strong in the first part of the year, but with the issues in Europe, theU.S.downgrades, the downgrades of our company and changes in client risk appetite, results were weak in the second half, especially in the third quarter,” Moynihan said. “We need that business to come back or we’ve got to do more in expenses.” (Bloomberg)
“I said to a colleague: 'I am not answering that. I am not answering that.' But of course I did, and they told me: 'Can you please collect your jacket and bag and come to room x, and please do not stop and speak to anyone on your way.' (Guardian)
The higher your IQ, the more likely you are to own stocks. (Crossing Wall Street)
Google hired 8,100 people last year. (Financial Times)