Which is the worst bank to work for at this particular moment in time? Could it be Goldman Sachs, with its shrinking fixed income business and waning investment bank? Apparently not. Kian Abouhossein, the head of European banks research J.P. Morgan, and Amit Ranjan, a VP-level equity researcher, say it's Deutsche Bank. In a new report, the two men say Deutsche Bank is their “least preferred” investment bank at this point in time.
Why? It's all down to DB's over-emphasis on fixed income sales and trading. J.P. Morgan's analysts point out that two thirds of Deutsche's profits are generated in the corporate and investment bank (CIB) and that fixed income currencies and commodities accounts (FICC) around 60% of all CIB revenues. Deutsche is over-exposed.
In fairness, the German bank is trying to reinvent itself by diversifying away from its reliance on FICC to boost revenue and focusing on building its M&A business in the U.S. Unfortunately, as J.P. Morgan points out, it's not there yet.
By comparison, Abouhossein and Ranjan say Goldman's FICC problems are far from terminal: all that's needed is a change in the client and product mix and a return to the kind of volatility that benefits Goldman's macro (rates and FX) franchise. The latter is likely to come in September as U.S. quantitative easing is unwound. - Goldman could be granted a reprieve soon.
Separately, the best jobs at Goldman Sachs are not in London. Nor are they (all) in New York. They are India and Poland.
In its quest to become the "Google of Wall Street," Business Insider reports that Goldman Sachs has posted eight job ads for roles in its Marquee division in New York in the past month or so. Exciting, except that it's posted a further 12 roles Marquee roles in Bangalore (Bengalaru) and four in Warsaw.
Marquee is a platform that provides clients access to the bank's analytics, data, content and execution capabilities via a browser or an API. The positions range from associate developer to vice president. The days of Indian developers working on unimportant back office projects are over: one of Goldman's Bangalore Marquee roles is for a developer with seven years' experience to create client engagement technologies for the investment banking team in New York.
Goldman's weak performance in FICC trading should result in a decision to downsize. (Bloomberg.)
Ex-Barclays CEO Antony Jenkins says traditional banks could face obsolescence in five-to-15 years at the hands of new financial-technology companies. (Bloomberg)
The Trump administration supports giving national banking licenses to firms in the emerging fintech industry. (WSJ)
Morgan Stanley is the latest global bank to pick Frankfurt for its new E.U. trading headquarters after Brexit. (The Independent)
A U.S. appeals court threw out the convictions of two former traders at the Dutch bank Rabobank in the first American criminal case to arise from investigations into Libor manipulation. (New York Times)
A rogue ex-Merrill Lynch trader has written a book about, er, cooking the books to hide the millions he lost during the financial crisis and the lessons he’s learned. (Knowledge@Wharton)
Nomura found that switching jobs will probably give you a bigger pay bump than sticking with your current employer. (Business Insider)
Here’s what students should do in their first and second years of university to maximize their chances of winning investment banking summer internships. (Mergers & Inquisitions)
Aaron Cowen, previously a portfolio manager at Soros Fund Management and chief investment officer at SAC Capital, founded Suvretta Capital Management's in 2012, and its master fund is up 12.5% after fees for the first six months of the year. (Business Insider)
Human stock pickers at hedge funds are actually beating their computer competition so far this year. (CNBC)
People still hate bankers. (Bloomberg)
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