Say it quietly, particularly if you happen to be in the vicinity of an irate British tax payer: RBS is back. Rebranded as NatWest Markets to comply with UK ringfencing regulations, its traders had an exceptional first quarter. Those in the know say this was no coincidence.
Although RBS is supposed to be cutting a crazy 14,000 out of 18,000 jobs in its investment bank between 2015 and 2019, it's also been hiring. And those strategic hires - mostly made two years ago, are only now coming to fruition.
The way those in the know tell it, RBS's rehabilitation began in 2013 when it hired Kieran Higgins from Nomura as head of fixed income trading for EMEA. A seasoned fixed income trader, 45 year-old Higgins set about recruiting in EMEA. Some of the key moves took place two years later, when David Henness joined from Bank of America Merrill Lynch as head of European and Asian rates trading and Peter Duenas-Brkovich joined from Nomura as the head of EMEA credit trading. RBS's resurgence means it's able to attract big names in London again: Mark Deniston, a former Goldman sterling swaps trader who'd been working for Brevan Howard, joined this January.
It's in the U.S. however, that RBS's fixed income trading business has undergone the biggest transformation. Whilst Higgins was hiring in London, senior staff were leaving in the U.S. 2015 saw the departure of Michael Lyublinsky, RBS's U.S. -based head of trading for Brevan Howard, and Richard Volpe, the bank's global head of dollar interest rates for Nomura.
RBS set about hiring in a new generation of trading staff in their wake.
Insiders say that as many as 30-40 new traders have been added at RBS's Stamford Connecticut in recent years. They include the likes of Mark Donlon, a former Citi managing director, who joined as head of global swaps trading in May 2015. Donlon was accompanied by fellow Citi MD James O'Malley, who joined as head of U.S. rates sales. The same year, RBS hired Alan Mittleman as head of rates trading. Mittleman joined from SocGen, but his pedigree was Credit Suisse and before that, Bear Stearns.
The suggestion is that these hires are only now coming to fruition. - After making big pronouncements on job cuts whilst quietly hiring senior talent, RBS's trading business is now roaring back to life. "They've rebuilt themselves," says one headhunter, speaking off the record. "Slowly and steadily, they've hired in some very good people on both sides of the Atlantic."
RBS's success is something Barclays might want to note. The other British investment bank is back in expansionary mode with an eye to addressing its travails in the U.S. rates market. RBS seems to have got there first.