Remember when Credit Suisse said it was going to close its primary dealership in European government bonds? When it cleared out its macro trading desk? When it said it would give up government bond market making too? Well, it just hired a new credit trader whose experience lies entirely in government bond trading,
Despite his background, Ardal Gronager is joining Credit Suisse next week not to trade government bonds but to trade European, UK and Swiss financials. The bank confirmed his appointment.
Gronager previously spent three years working on various government bond market making desks at Morgan Stanley after graduating from Britain’s Durham University in 2012.
While Credit Suisse said it was “scaling back” the macro business and “exiting” European primary dealer roles last October, it retained a presence in credit trading. However, credit trading revenues fell 20% year-on-year at the Swiss bank in the second quarter, while Barclays and HSBC achieved increase of 23% and 6% respectively.
Gronager’s arrival at Credit Suisse comes as the bank continues to hack away at its London cost base. The bank is removing 1,850 jobs from its London operation, of which 1,200 have gone already. It’s notable that Gronager is comparatively junior whereas many of those who left the bank were very senior. Is Credit Suisse engaging in a process of juniorization? Maybe.
Although Gronager is there to trade financials, the Swiss bank may also quietly benefit from his government bond trading expertise. Another Credit Suisse insider suggests that the Swiss bank closed all its European government bond trading desks last year, except the Greek desk. “Greek government bonds were trading like credit anyway – they’re seen as a credit trade rather than a safe government bond.”