If you work for Barclays and are waiting for your bonus, you have reason to feel alarmed: the bank has just announced another £330m charge for legal and regulatory costs related to the investment bank. Precedent suggests this will be deducted from the bonus pool. Notably, Barclays has waited until bonuses are in sight before announcing the additional investment banking-related charges – despite kitchen-sinking all charges related to the PPI and retail banking scandals in the second quarter of 2013.
Not only are Barclays’ senior fixed income professionals at risk of losing their jobs, therefore, they’re all at risk of being paid a lot less than last year. Barclays’ CEO Antony Jenkins is under increasing pressure to cut costs fast. Barclays, “should really cut much quicker, and much deeper,” says Investec analyst Ian Gordon today.
Cut to Nomura.
The Japanese bank has just released its results for the third quarter (its fiscal year is a little off) and for the past nine months combined. And they look very good indeed. Firstly, revenues in the wholesale bank were up 27% year -on-year in the nine months to December and pre-tax profits were up 117% over the same period. Secondly, spending on compensation and benefits across the bank rose 11% over those nine months and – even better – Nomura says very specifically that money put aside for bonuses rose over the past quarter.
Inevitably, it’s not all great at Nomura. EMEA wholesale banking revenues fell 6% in the third quarter and equity derivatives has had a challenging time. But – yet again – Nomura cited its rates and credit business as a big driver of European revenues. This is the antithesis of the message from other banks, which have been struggling in rates in particular.
As we reported last week, Nomura has been hiring for its rates and credit sales team. RBS has been Nomura’s favoured hunting ground, but there’s no reason why fixed income professionals at Barclays shouldn’t also give the Japanese bank a try.