Forget Morgan Stanley and its 34% year-on-year increase in fixed income trading revenues. Forget Goldman Sachs and its mitigating factors. Forget JPMorgan. If you want to work for a bank that’s outperformed the rest in fixed income so far in 2012 AND is willing to take risk where appropriate, think: SocGen.
SocGen’s first quarter results are out today. After tweaking its strategy, bringing in Didier Valet as chief executive of the investment bank, and allowing a lot of people to take voluntary redundancy, its fixed income business in particular, is doing outstandingly well. Year on year, revenues in its fixed income, currencies and commodities business were up 39% – more than any other bank.
Equally interestingly, while banks like UBS boast of their risk aversion and general temperance, SocGen has been ramping up risk – as evidenced by the graph below.
“They reduced risk taking at the end of last year, but ramped up again to take advantage of the LTRO,” says one analyst. “They’ve played it very well.”
Incentives to leave French banks
Separately, both SocGen and BNP Paribas are understood to be operating voluntary redundancy programmes encouraging staff to leave. SocGen’s was known about, BNP’s has been a little more covert.
SocGen’s programme has been a little too successful. Les Echos reported last month that 2,200 people had asked to leave, although the bank only intended to cut 880 jobs.
“In France, voluntary redundancies are the only way to sack people,” says one French headhunter in London. “SocGen have been paying some pretty generous packages – senior people have been offered €200k to go and juniors have been offered a minimum of € 30k.”
SocGen’s voluntary leavers also get paid fully for their five month notice period, he adds.
Less is known about BNP’s voluntary redundancy programme, except that it’s increased its redundancy payments by 20% for those who go of their own accord and there have been few takers. Our French site noted last month that only 250 employees at the investment bank had put themselves forward, although the bank wanted to get rid of 373.
BNP’s voluntary redundancies have extended to London, say headhunters. “A few senior people have put their hands up,” says one fixed income headhunter. One of them is rumoured to have been Garry Monaghan, BNP’s former head of Euro bond and swap trading. The FSA register suggests he left the bank in January. Maybe he wants to work for SocGen.