If you work in fixed income for Barclays or Deutsche Bank and you receive a better job offer, you may want to do some serious weighing-up. As we noted last week, fixed income sales and trading hasn’t had a good start to the year, with first quarter revenues likely to be down 15% compared to 2013. Today, the Financial Times has joined the crowd of doom mongers predicting that fixed income redundancies are advancing: it says that two of the five top fixed income divisions are planning to make further redundancies due to the insipid market conditions.
Which could those two fixed income divisions be? The top (six) fixed income businesses are to be found at Bank of America, Barclays, Citi, Deutsche Bank, Goldman Sachs and JPMorgan. Of those, Barclays and Deutsche Bank look particularly vulnerable: Deutsche Bank’s fixed income currencies and commodities (FICC) business has been steadily losing market share and has so far resisted any major redundancies. Barclays is struggling against high costs and had been hoping that FICC revenues would rebound in 2014 in order to absolve it of the need to slash headcount. That looks like wishful thinking.
There are some signs that Barclays and Deutsche fixed income bankers are leaving ahead of likely culls (or maybe as forerunners to them). As we reported last week, Barclays has lost its head of FICC research. Now, Financial News reports that Deutsche Bank has lost Michele Foresti, its former head of European credit and rates trading. Barclays paid higher bonuses this year to prevent a ‘death spiral’ and to retain its best people. but the Financial Times points out that Barclays’ share price has fallen to a 15 month low over concerns about its FICC business and the future of its investment bank. That won’t exactly inspire staff paid in Barclays’ stock to hang around.
Separately, much has been made of the tantrum thrown by 44 year old Euan Sutherland, the suntanned ex-Coop boss who quit in a fit of pique after his pay became public knowledge. Sutherland wold have been responsible for Coop’s hitherto mismanaged bank. However, as the Telegraph points out, he is a retailer rather than a banker by trade. The Guardian observes that Stephen Hester, an investment banker, put up with far greater scrutiny of his pay far more stoically while was CEO of RBS. So maybe bankers aren’t so petulant after all.
Hedge fund Millennium Management wants to hire 3 or 4 people to manage a credit portfolio of $350m-$450m. (Financial News)
Christian Binaghi, head of Latin American debt trading at Deutsche Bank, has also left the firm. (Bloomberg)
Stuart Hendel, global head of prime brokerage at BofA is leaving following a disagreement over strategy. (Bloomberg)
John Travis, former co-head of EMEA capital markets execution at Morgan Stanley, is leaving to join Cordet Capital Partners, an expansionary hedge fund set up by a former colleague. (Financial News)
Unicredit is laying off 8,500 staff, most of them in Italy and Germany, by 2018. (The Times)
Keith Edwards, the man who blew the whistle on the mortgage fraud at JPMorgan and resulted in the bank paying $614m in fines, is to be rewarded with $64m. (Reuters)
Big growth in leveraged finance has basically been big growth in cov-lite loans. (Euromoney)
BOE Carney: This Is As Serious As Libor If Not More So. (Wall Street Journal)
Trader arrested for insider dealing had detailed written plan for spending his winnings. (Daily Mail)
Lloyds trader front ran himself. – What?! (Bloomberg)
Wolf of Wall Street chest thump remix. (Gawker)