JPMorgan hasn’t made many redundancies at its investment bank. Last year, it reduced headcount by only 315 people. In last week’s investor presentation there was no mention of coming cuts.
And yet, rumour has it the bank will be making a round of redundancies on its trading desks in London today. One person per desk is allegedly going, or around 10% of the total. The bank declined to comment.
Meanwhile, Anshu Jain has done away with two key German contenders for power at Deutsche, prompting complaints in Germany that Jain’s London investment banking clique is, “taking over from the inside.” As William Wright points out, nine out of fourteen members of the executive committee are now from the investment bank.
In some ways, however, the elevation of Colin Fan and Robert Rankin as co-heads of Deutsche’s investment bank could be seen as a demotion for London. Although he’s based in London and has been registered with the FSA since 2007, Canadian-Chinese Harvard graduate Fan was head of Asian equities for Deutsche previously and is an emerging markets and credit specialist. Australian-born Rankin was mostly recently head of Deutsche’s Asia Pac operations. Unsurprisingly, therefore, the reshuffle is also being heralded as a victory for Asia.
Meanwhile, Italian-born Michele Faissola, who previously headed Deutsche’s commodities and rates business in London and was widely seen as a potential contender to Jain, has been moved out of investment banking altogether and will now run the asset and wealth management.
At a time when Deutsche may need to make cuts, this leaves the bank’s London-based commodities and rates traders looking exposed. Deutsche’s rates business under-performed the market in Europe last year. With the cost income ratio in Deutsche’s corporate banking and securities division standing at 111% in the last quarter, now may not be the best time to work in what was once Faissola’s team.