Yesterday was Citigroup's first quarter fixed income investor review. After failing the recent Federal Reserve Stress Test, Citi said it's too complicated and needs to simplify itself. After cutting 11,000 jobs across the business in 2012, slashing equities sales and trading staff in early 2013 and cutting 200-300 jobs from its global markets business earlier this month, Citi said it remains focused on reducing costs. However, there is also the potential for some hiring.
Mike Corbat, Citi's CEO, said the bank will be spending more money on both staff and systems to upgrade its 'capital planning tools' in time for the Fed's next annual review in early 2015. That sounds like good news if you're a regulatory capital specialist. Less promisingly, Corbat said the money for the new investment will come from cost cutting and productivity gains in other areas.
Separately, Bloomberg has run into a Russian who illustrates the downside of going on a family holiday with a markets professional when things are turbulent. Alexander Antipov, the head of sales at Veles Capital LLC, is on a holiday in Acapulco, Mexico with his wife and children. However, Antipov isn't really holidaying with them. During the night, while his family sleep, he's been awake and trading from the hotel balcony. During the day, while his family are on the beach, Antipov has been asleep and in the hotel room. “It felt surreal,” 40 year-old Antipov said in relation to the Russian market, omitting to mention his wife's reaction to his holiday routine.
Mike Mayo thinks Citigroup’s stock will double in the next four years. (CNBC)
Barclays isn’t pulling out of commodities entirely. It will emphasize ‘efficient electronic execution’ and still trade precious metals, financial oil, US financial gas, and index products. (Telegraph)
Barclays has 160 employees in commodities trading, sales and research. Last May it had 200. Deutsche Bank is cutting about 200 raw-materials jobs after deciding last year to exit dedicated energy, agriculture, dry-bulk and industrial-metals trading. (Bloomberg)
As Deutsche Bank, Bank of America and Barclays pull back from commodities trading, Goldman Sachs and Morgan Stanley are benefiting. (Bloomberg)
Deutsche Bank is reducing its equities team in Latin America. (Bloomberg)
Deutsche Bank salesman admits to bribing client with $8.8k of meals and golf outings. (Businessweek)
VTB Capital might close its 40-person New York office if the US imposes sanctions related to Ukraine. (Bloomberg)
Why this will be a bad year for bank stocks (WSJ).
Cliff Asness talks AQR Capital Management. (Forbes)
Vince Cable has let it be known that he doesn’t like big bonuses and high pay. (Financial Times)
The presumption: If you are successful, you are busy or insanely busy. Only losers have a lot of free time.(Naked Capitalism)