Goldman Sachs and HSBC are sort of similar these days. Since former Goldman MD Mathew Westerman took over as head of HSBC's global banking and markets business last May, HSBC has achieved a sort of Goldmanesque tinge: bonuses are being more ruthlessly allocated according to performance, end of year reviews are "harsher", under-performers are being booted out, and senior HSBC M&A bankers are being made to explain exactly what they do with their time.
All of this means Goldman bankers who feel like joining Westerman should feel quite at home. Morever, while HSBC as a whole didn't look too good in today's fourth quarter results and the bank's share price is down 7% today alone, the global banking and markets division is doing ok and HSBC's share price is still up 48% on this time last year. Still unpersuaded? Here are the other elements of HSBC's multifacted appeal to the disaffected banker at Goldman Sachs (or elsewhere).
To reiterate: HSBC's problems are not in its investment bank. As Deutsche's banking analysts noted this morning, the global banking and markets (GBM) division actually achieved a "small beat" (vs. expectations) in the fourth quarter. Everywhere else achieved a large fail - especially commercial and retail banking.
Profits in GBM rose 11% last year (admittedly they rose 22% across Goldman Sachs). As the chart below shows, HSBC's fixed income traders out-performed the entire market last year, with a near 22% increase in revenues. At Goldman Sachs, fixed income revenues rose 3%.
The average material risk taker globally at HSBC earned $879k (£707k) last year. Goldman Sachs hasn't released its official pay figures for UK risk takers yet, but the last available figures (for 2015) show Goldman paying its registered staff in London an average of $2.7m each.
HSBC's average figure could be deceiving though - after all, it's supposed to be paying high performers a lot more than the rest now. Today's 2016 remuneration report includes the following table showing that someone at HSBC earned in excess of €10m ($11m) last year. Admittedly, 954 material risk takers earned less than €1m, but still...
Like every other investment bank out there, HSBC is cutting heads: last year, it did away with 1,195 people.
However, HSBC's layoffs are a mere flesh wound: those 1,195 people were only 2.4% of the investment bank's total. Moreover, HSBC's GBM division is impressively efficient: costs only consumed 59% of revenues last year, compared to nearly 75% at Goldman Sachs,
If HSBC wants you, it will waft some money to get you. Last year, the bank paid 18 material risk takers a combined $11.7m to come in sign-on bonuses to come and work there. It also paid one member of senior management (Westerman, maybe?) $1.6m.
You know where you stand with HSBC and Brexit. The bank has been abundantly clear about its intention to transplant 1,000 traders to Paris. This has raised eyebrows, but it's worth bearing in mind that HSBC employs 46,659 in its global banking and markets unit and that those 1,000 are only 2% of the global total.
Goldman Sachs, on the other hand, has said nothing categorical about its post-Brexit intentions and insists it's still in the contingency planning phase. Even so, there are nasty rumours that the bank is planning to slash London headcount by up to 50% as it shunts people to New York, Frankfurt and Poland. If this comes to pass, Goldman bankers may want to give Westerman a call.