Ostensibly, banks are still 100% strategically aligned to the idea that Asia is the place to be building their business. Hence, Deutsche has said it wants to continue growing in Asia Pac, as has Credit Suisse. Jamie Dimon is one of the only CEOs to come out and admit he has no plans to build in Asia during this quarter.
But even while banks remain outwardly committed to the notion that Asia is the big banking market of the future, inwardly they appear to be having doubts. As we’ve noted on many occasions Asia is a big cost centre and has yet to produce the expected increase in revenues. Take Citigroup, for example, where EMEA securities and banking revenues rose 1% last year, while Asian revenues declined 1%.
CNBC has an interesting article today looking at how this is playing out for the Asian bonus pool. It claims:
“Asia investment banking revenues are not going to be sufficient in the short term to support the rate at which the industry has expanded in the region. Global bosses are no longer as willing to subsidise Asia expansion with US or Europe revenues on the expectation of greater growth.
That means slashing pay costs in Asia by any means: reducing overall pay, compensating in the bank's stocks rather than cash, halting benefits such as housing allowances, and in many cases paying no bonus at all.”
If Asia is no longer the golden zone, what is? Germany maybe? As we reported yesterday, German bank Berenberg wants to hire 30 equity researchers in London. Today, our German editor reports that it also wants to hire 150 investment bankers in Frankfurt (over the next three to five years).
Macquarie has cut 10% of its Asian investment banking workforce. (Bloomberg)
German banks are like wonderful microbreweries. (Reuters)
Foreign banks may resume hiring in Japan, soon. (Bloomberg)
Actually, the French version of the transaction tax will exclude all derivatives except naked sovereign CDS and will only be levied on shares of companies quoted on the Paris bourse with a market value in excess of €1bn. (Financial Times)
Francois Hollande says France could never have accepted David Cameron's attempt to create a "sanctuary" from financial regulation for the City of London in the new European treaty. (Guardian)
Many traders would prefer to work for the Mercurias, the Trafiguras or the Glencores. (Reuters)
Coutts plans to hire 20 investment bankers in theMiddle East. Most of them are likely to be based in Dubai. (The National)
When the German national football team is playing, trading volumes in Germany fall 60%. (Telegraph)
It is quite a lot more expensive to live in Paris than London. (The Economist)
You should be working in Tanzania. (Bloomberg)
Why investment bankers are like sexy pirates. (CNBC)
DJ’s, firemen and doctors are considered more eligible than bankers (Financial News)
Bank of America stock is up 48% this year. (Wall Street Journal)