Investment banks are cutting staff again. With the exception of Barclays, the redundancies at Deutsche Bank and Bank of America are more trimming than wholesale axe swinging. However, if BoA follows Deutsche and focuses most of the cuts on London, City workers at both banks have a right to feel peeved.
As the chart below released today by research firm Coalition shows, Bank of America Merrill Lynch was one of the strongest performers relative to 2012 across its fixed income commodities and currencies business, as well as equities in EMEA (even if it remains a tier two and three player across these business lines). This might explain the simultaneous hiring and firing at the bank.
Deutsche Bank, which is reportedly focusing its 500 job cuts on London, was the number one bank across FICC and investment banking advisory in EMEA and one of the most improved players in equities. In the U.S., meanwhile (which is said to be entirely spared from redundancies) the bank remains firmly in tier two and three, according to Coalition’s rankings.
Q1 performance in 2014 will have undoubtedly influenced the banks’ decisions to roll out redundancies, along with the annual cull of underperformers, but it demonstrates that working for a bank that dominates or is in the up doesn’t necessarily mean job cuts won’t be forthcoming.
Where is it going wrong for Deutsche’s FICC team? It remains number one in FX, but has slid out of the top tier for G10 credit, according to Coalition’s rankings. Elsewhere, it’s in the same position as 2012.
The same can’t be said for Barclays, however, which is said to be planning thousands of redundancies in its investment bank. In 2012, the bank was dominated in G10 rates and was a market leader in FX and securitization. Now, only its rates business remains in the top three (a division that has been hammered in 2013) and its equities presence has slid down into the third tier.