It’s the Goldman Sachs 2014 US Financial Services Conference. Yesterday, both Michael Corbat of Citi and Brian Moynihan of Bank of America made presentations. The two men said pretty much the same things.
Firstly, they both said that late third quarter improvement in fixed income trading is well and truly over. – Corbat said the one-off nature of the volatility in October had proven "difficult to trade" Share on twitter. Moynihan said fourth quarter trading revenues at BAML will be lower than a year before and lower than the third quarter. Secondly, they both said that the future is all about cutting costs whilst investing in electronic trading and in risk and compliance. In the past two years, Corbat said Citi has added 10,000 risk and compliance professionals, and cut 30,000 jobs elsewhere in the bank. Moynihan said Bank of America is now spending a huge $1bn annually on risk and technology to support its markets business and that this is putting pressure on markets’ P&L. If markets businesses are to make money in future, they’ll need to cut costs further, said Moynihan. – That will require more investment in electronic trading, and by implication more cuts elsewhere.
Separately, you probably won’t want to leave one investment bank for another this December as you’re unlikely to get any compensation for your lost bonus. But you might want to leave an investment bank for a technology firm. This is what Credit Suisse banker Imran Khan has done. Specifically, Khan has quit CS in New York for SnapChat in LA, where he will be tech firm’s first strategy officer. The Financial Times notes that Khan will be reporting to Snapchat’s 24 year-old founder and that he’s foregone his bonus at Credit Suisse. Neither factor seems to have dissuaded him.
While big banks are cutting travel costs and curtailing M&A bankers’ ability to meet clients, boutiques are eating their lunch. (Economist)
Counting the ways in which Deutsche Bank avoided US taxes. (BloombergView)
Deutsche Bank investors are frustrated, but hanging in there. (Reuters)
Goldman Sachs: still the best prime broker. (FinAlternatives)
Must you now flirt your way to the top as a man in banking? (Financial Times)
Meet the world’s most powerful data scientists. (Forbes)
Six questions you should ask about a company’s culture before you accept the job. (FastCompany)
What to do when your boss doesn’t like you. (HBR)