Morning Coffee: Why UBS investment bankers have reason to smile. Mass hiring at Barclays

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UBS Christian Meissner

UBS made headlines late last year when it was reported that the bank was intensifying succession planning for Chief Executive Officer Sergio Ermotti. While banks always have a succession plan in place, the Bloomberg report was eye-opening because Chairman Axel Weber was said to prefer an outside candidate to eventually replace Ermotti, who earlier in 2018 noted that “something probably would not have gone well” if his successor wasn't already in the building. Now the puzzle pieces are coming together – and the end result could be a big win for investment bankers at UBS.

The Swiss bank is reportedly in early talks with former Bank of America investment banking boss Christian Meissner about a senior position that could set him up as the heir apparent to Ermotti. While no deal is in place, a potential Meissner takeover would likely be a welcome sight for UBS investment bankers, who have been concerned following the recent departure of longtime group head Andrea Orcel after he left in September to become the new CEO of Spanish bank Santander. Orcel wasn’t beloved by all at UBS, but he was the face of the investment bank and reportedly shielded and retained top dealmakers when Ermotti began steering the firm toward becoming more of a wealth management shop post-crisis. With Orcel gone, investment bankers at UBS lost their top advocate and have been fearing for their future, according to the FT.

But the potential for a Meissner appointment surely provides a sense of optimism for bankers at UBS. The former BofA investment banking chief reportedly left the firm last year over disagreements with the bank’s perceived shrinking appetite for risk-taking, particularly in M&A and leveraged finance. Bank of America was said to have started passing on potentially lucrative overseas deals in favor of safer mid-market work in the U.S. – a strategy that reportedly frustrated many bankers and led to a series of defections. Meissner’s background and recent history suggests that he would champion UBS’s investment bank, if he finds his way to the top chair. The current top internal candidates to eventually replace Ermotti include the wealth management unit’s co-heads, Martin Blessing and Tom Naratil.

It’s important to note, however, that Ermotti isn’t said to be preparing to leave anytime soon. Earlier reports regarding the bank’s succession planning indicated that he could remain in charge for at least another two years. Plus, UBS just recently named two co-heads to replace Orcel, so it’s unlikely that Meissner could walk in and take the reins of UBS’s investment bank. Still, the potential hiring of Meissner – in any senior role – would likely be greeted warmly by UBS investment bankers.

Elsewhere, Barclays is starting to ramp up its Brexit plans in a serious way. The British bank has appointed roughly 100 investment bankers in Europe through external hires and internal reassignments, according to Financial News. Barclays has also made another 65 graduate hires as it prepares for the U.K.’s impending exit from the EU. If you’re looking for a banking job in Europe, Barclays seems to be a good place to start.

Meanwhile:

The gender pay gap in the U.K. at firms like HSBC, Deloitte, McKinsey and Nomura has actually gotten even worse. (Financial News)

Each day, a new article is published about a renowned hedge fund that suffered a double-digit loss in 2018. The latest involves Larry Robbins’ Glenview Capital Management, which saw its main fund decline more than 16% last year. Like some other funds, Glenview Capital was managing the year reasonably well until December, when the fund declined 14%. (WSJ)

And then there’s Bridgewater Associates. The flagship fund of Ray Dalio’s famed Connecticut firm returned more than 14% last year. (Bloomberg)

Roughly three years ago, Bank of America became one of the first companies in the U.K. to extend its health insurance policy to include free gender reassignment surgery. Yet the bank has reportedly come under fire by some for not also offering infertility diagnosis and IVF. (The Times)

If you are any good at your job, you are going to face “tormentors” within your own company – people who try to obstruct and derail you. That’s a good sign, according to one economist and former MD at Banker’s Trust. It means you are doing something right and are scaring them, particularly when you work in a competitive environment like banking. Embrace it. (The Times)

Three former London-based Credit Suisse bankers have been brought up on U.S. fraud charges related to loans to state-owned companies in Mozambique. U.K. authorities abandoned the investigation two months ago. (The Guardian)

Part of J.P. Morgan’s latest mantra under CEO Jamie Dimon is to be more like Amazon. The bank has adopted Amazon-inspired initiatives as the two companies partner and compete with one another. Dimon led a senior management meeting back in 2017 to specifically address how Amazon could make a larger play into financial services and how J.P. Morgan could fit in. (WSJ)

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