Late Lunchtime Links: Bad news as Goldman cuts pay 16%, while FICC revenues and profit per employee collapse
Goldman has reported its fourth quarter results. If you work there, they're not massively good news.
Needless to say, the average Goldmanite is still preternaturally well off. After the cost of the UK bonus tax is deducted, mean pay per head for 2010 comes in at $418k. Less promisingly, this is down 16% on 2009.
This decline is more than at JPMorgan, which restricted the compensation trimming at its investment bank to just 3% on a per head basis. However, the average JPM banker was paid a mere $355k.
If Goldman bankers are feeling chuffed about their superior numbers, they might also want to cast a cautionary eye to the amount of profit they're generating. Goldman's headcount rose by 3,200 last year, and now exceeds the previous high of 2007. In the past decade the firm has hired 13,000 people and increased headcount nearly 60%.
However, as Goldman pushes into Asia and increases headcount, the profitability of all those employees is declining. In 2009, net earnings per head were $375k; last year they were $216k.
Declining FICC revenues are partly to blame. At -40% quarter on quarter and 48% year on year, the collapse in Goldman's FICC revenues in Q4 echoes Citigroup's. By comparison, Zero Hedge points out that 'Investing and Lending', which includes Goldman's prop trading operations, was among the only area to increase revenues last quarter and that margins here were by far the highest, at 50%. This, however, is where regulation is likely to hit hardest in the years to come.
Goldman's employees reportedly gave less to charity in 2010 than in 2009. Maybe they're feeling less secure about the future than might be expected.
Goldman partners are about to make a fortune on their 2008 options. (Dealbook)
Goldman has dispensed with Kevin Connors, London-based co-head of FX sales following a breach of internal compliance procedures. (Businessweek)
US banks are going to be obliged to spend a fortune on compliance. (Financial Times)
UBS plans to hire very aggressively in Asia. (WSJ)
UBS wants to hire 500 people in China over the next three to five years and is opening a university in Hong Kong. (English People Daily)
UBS tells its Russian staff never to reject an invitation to the sauna. (Dealbreaker)
UBS may allow bankers to don red underwear, eat garlic. (Dealbreaker)
The Singapore stock exchange has cancelled its lunch break as of today. (BBC)
Michel Barnier says banks should act ethically and all pay moderate bonuses. (Financial Times)
Why are Britons crosser about bankers' bonuses than anyone else? (Independent)
Kroll Bond Ratings (based in Maryland and New York) wants to hire lots of analysts. (Financial Times)
Frederick Denjoy, a Brevan Howard trader who left for Switzlerand last year, has come back to London to set up a hedge fund (Denjoy Partners) (Financial News)
Meet Philip Lambert and his 11 man band who worked on the BP Rosneft deal. (Evening Standard)
Wife of Ashley Unwin, the head of PricewaterhouseCoopers' 200 million-a-year consulting business, has been blogging about his spending habits. (Telegraph)
