We all knew they were coming but now they're nearly upon us, the tectonic shifts at Deutsche and (to a lesser extent) Barclays, are no less dramatic for being so heavily anticipated.
If you work for Deutsche Bank now, the rough rule of thumb seems to be that you will be safe so long as a) you weren't best friends with Anshu Jain, b) you didn't join Deutsche Bank in the 1990s after working for Merrill Lynch, and c) you were in no way tarnished by any of the scandals that have befallen the bank in recent years.
The full details of Deutsche's restructuring (described by the bank's chairman as one of the most 'fundamental reorganizations' in the bank's history) are available on its website. If you work for Deutsche's investment bank, the departure that registers highest on your Richter scale will be that of Colin Fan, co-chief executive of the investment bank and head of the bank's securities (trading) business.
Fan was mentored by Anshu Jain; he joined Deutsche in 1998 from Merrill Lynch (from whence Jain also came); and he presided over the investment bank when it was involved in alleged money laundering in Russia - thereby fulfilling every criteria for instant ejection. Almost equally seismic is the departure of Michele Faissola, who joined Deutsche from Merrill Lynch along with Jain in 1995, and presided over the rates business at the time of the LIBOR scandal. In Fan and Faissola, Deutsche's army of fixed income traders lose two of their biggest supporters. Any nervousness in the fixed income ranks can be forgiven.
By comparison, the safest jobs at Deutsche's investment bank seem to be in equities and corporate finance. Garth Ritchie, the 47 year-old head of equities, is becoming head of the entire markets unit. Jeff Urwin, who joined Deutsche Bank from J.P. Morgan in February, is becoming head of a new corporate and investment banking unit. Both men are joining Deutsche's management board from 2016.
Barclays is also making a few changes under new CEO Jes Staley. The Financial Times suggests that the safest people at Barclays will be those working in its trading operations in the UK and the US. Staley is reportedly planning to 'refocus the bank' on these two financial centres, says the FT. Trading operations in Asia, Latin America and Continental Europe will be 'exited', although Barclays will retain a small presence in South Africa, Japan and one other Asian centre (as yet unnamed).
Separately, Giles Turner, a journalist for the Wall Street Journal, recalls the advice of Quintin Price on how to maintain a relationship when you work in finance. One of the winners in Deutsche's reorganization, Price is joining from BlackRock to head Deutsche's asset management business. Back in 1997, Price revealed that he had dinner with his wife every Thursday evening, even if doing so meant flying back from Hong Kong. "Don't be seduced by investment banks with their 24-hour canteens," Price said. "They may be paying you more but it's only because they're buying your soul." Bankers pride themselves on their intellectual prowess but, "have not the wit to organize themselves a decent balanced life," he concluded. We assume Price is married still...
Barclays is saving money by not actually employing Staley until February 2016, by which time a large tranche of his JPM stock will have vested.
Rogue Trader Repentant (BBC)
Kweku Adoboli will never work in the City again and is very penitent: “I fully recognise the reasons for my prohibition and thank the FCA for their restraint.”
Emulating A Swiss Rival (WSJ)
Credit Suisse wants to become like UBS, but it won’t be easy: it needs to cut the fixed income business but stands to lose a lot of revenue.
What’s Happening Here? (Bloomberg)
Credit Suisse clients are confused.
Falling Short At Citi (WSJ)
Citi is still not earning its cost of capital.
FoFs Suffering Too (WSJ)
It's a bad time to be working for a fund of hedge funds.
Bad news about bonuses. (Reuters)
All large investment banks are putting aside less for compensation this year, than in 2014.
Harmful opportunism is a likely but not inevitable effect of empowerment.
Quote of the Day:
‘That’s mad. If the market carries on like it is, it’s going to become a war,’ the 73rd recruiter to call a software developer who accidentally posted his resume online.