If you’re a regular reader of eFinancialCareers, you’ll already be familiar with our suggestion that Citi’s markets business is already many of the things that Goldman Sachs aspires to be and looks like an appealing place to work on this basis. At today’s Barclays Global Financial Services Conference, Citi CFO John Gerspach addressed the issue a little more directly: “What makes Goldman Sachs bankers join Citi?”, asked one of the audience members. Gerspach’s was simple: momentum.
Citi has “momentum,” said Gerspach. New hires from Goldman and elsewhere, “are seeing the momentum for themselves. It’s not just that we’re selling the story about where we can get to in the future from a standing start.” Citi’s new hires can already witness Citi’s strong customer base and healthy customer dialogue, added Gerspach. They’re “building on our existing success.”
Based upon the relative performance of Citi and GS so far this year, there might be something in this. As the chart below shows, year-on-year revenue growth at most of the businesses in Citi’s investment bank far exceeds that at Goldman Sachs – with one exception, equities, where Goldman is doing rather well and Citi’s recent big investments have yet to come through.
Of course, it might not last. Gerspach also said that Citi’s fixed income trading revenues are likely to fall 15% year-on-year in the third quarter and that third quarter investment banking revenues are likely to be lower than in Q2.
Whether Goldman bankers really are rushing to join Citi is another question. Despite Gerspach’s suggestion that GS people are being lured by Citi’s momentum, Citi’s best known GS hires happened last year, when it poached two senior Goldman equities sales staff in EMEA and a senior e-FX salesperson in Asia. By comparison, this year’s big Goldman hires at Citi have been mostly restricted to Australia, although Citi did poach Muir Patterson from Goldman to run a new ‘activist shareholder defense group’ in May. Momentum or not, Goldman staff aren’t exactly pouring across to Citi. The U.S. bank might need a few more quarters of far superior growth for that.
The momentum at Citi makes Goldman look moribund