Which banks can afford to hire now? Which banks need to cut back? Which divisions should you be working for (and where) and which divisions should you avoid?
With the following charts, all these questions will hopefully be answered. With the exception of the first, which comes from the European banking analysts at Deutsche Bank, they're all the work of Tricumen, a banking intelligence firm co-partnered by a former head of EMEA strategy at J.P. Morgan. Tricumen's spider charts below depict average productivity per head for each bank by division and region. Based on its own research, they imply that some businesses are far more productive than others.
1. Across investment banking divisions as a whole, J.P. Morgan, Citi and Bank of America look great. Credit Suisse and RBS may be to be avoided
The chart below from DB's European banking analysts suggests Credit Suisse has a cost problem. It also has a return on assets problem. Neither are good if you a) want to keep your job or b) want to trade asset hungry products.
You may notice, however, that DB's chart is based on figures from last year. Credit Suisse tempered costs in the first half of this year (they were down to 82% of revenues in global markets in the first six months vs. over 90% in the first half of 2016). Still, if you want to be safe, a job at a big U.S. universal bank looks like the best bet.
2. Barclays and Credit Suisse excepted, avoid European banks in Americas IBD
Goldman Sachs wants to hire some more investment bankers. It can afford to. In the U.S. at least, Tricumen says Goldman's investment bankers are among the most productive in the market.
By comparison, Tricumen says most investment bankers at European banks are seriously unproductive on Wall Street. This is especially the case at UBS. Barclays and Credit Suisse are exception.
Operating revenue/Front Office headcount in Americas ECM, DCM, M&A and securitization
3. Beware Credit Suisse in U.S. fixed income, currencies and commodities. Aim for J.P. Morgan instead
You don't want to work for RBS in the U.S. Tricumen's charts suggests RBS Americas employees are far, far less productive than those at rival banks. However, Tricumen partner Darko Kapor says RBS's U.S. business is now so tiny it barely merits a mention. The real productivity straggler in U.S. fixed income is therefore Credit Suisse - the chart below suggests productivity there is nearly two standard deviations below the mean and that CS either needs to increase revenues or cut some staff.
Operating revenue / Front Office headcount in Americas fixed income, currencies and commodities (FICC)
4. Beware SocGen and Credit Suisse in U.S. equities. Aim for Morgan Stanley instead
European banks' employees are abnormally unproductive in U.S. equities sales and trading too. If you want to keep your job and get paid, the chart below suggests you want to avoid them. The exception, again, is Barclays. Tricumen says the most productive bankers in U.S. equities trading work for Morgan Stanley (two standard deviations above the mean), followed by Goldman Sachs.
Operating revenue / Front Office headcount in U.S. equities
5. Beware UBS's IBD business in EMEA. Try Credit Suisse's instead
UBS's entire investment bank is run by a former M&A banker from BAML, Andrea Orcel. This doesn't mean it's EMEA investment banking division (IBD) is healthy though. Tricumen says UBS's EMEA IBD professionals are strangely unproductive (around 1.5 standard deviations below the mean). By comparison, Tricumen says Credit Suisse's EMEA IBD bankers punch above their weight.
Operating revenue/Front Office headcount in EMEA ECM, DCM, M&A and securitization
6. Beware Morgan Stanley's EMEA fixed income business. Try Citi's instead
We've already suggested that Citi's fixed income trading business might be a good place to be. For EMEA at least, the chart below from Tricumen confirms that.
More surprisingly, Tricumen suggests that Morgan Stanley's supposedly thriving and efficient fixed income business isn't that thriving and efficient in EMEA after all. And that Goldman's struggling business is quite productive on a per head basis. Who knew?
Operating revenue / Front Office headcount in EMEA fixed income, currencies and commodities (FICC)
7. You may not want to work for Credit Suisse or Citi in European equities. Try J.P. Morgan or Morgan Stanley
For the past two years, Citi has been busy rebuilding its European equities business. The Tricumen chart below suggests it might have overdone it: revenue per head at Citi's equities business now well below the EMEA average. It says the same applies to Credit Suisse (which has also been hiring). By comparison, equities traders at J.P. Morgan, and Goldman Sachs are seemingly sitting pretty.
Operating revenue / Front Office headcount in EMEA equities
8. Avoid UBS and Goldman Sachs in Asia
Lastly, Goldman Sachs says it wants to invest more in Asia. The Financial Times says Goldman has to say this - its Asian business isn't doing well and the continent is too large and too fast-growing to ignore. However, Tricumen's chart below suggest Goldman's staff - together with UBS's - are already some of the least productive in Asia. By comparison, the highest levels of Asian productivity are to be found at RBS and Barclays - banks which made significant Asian layoffs in recent years.
Operating revenue / Front Office headcount in all Asian investment banking activities (sales and trading and IBD)
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