Citi's European hiring does not appear to have made much difference
At our fabled top secret HR roundtable last week, the talk was all of upgrading and dispensing with recent hires who haven't performed quite as expected.
It is a theme that could, possibly, apply to Citi's Q3 results, which are out today. Citi has been one of the big investment banking hirers in Europe this year. And yet its revenues leave something to be desired.
In the first nine months, revenues at Citi's EMEA Institutional Clients Group increased 1% to $8.5bn. Given recent market conditions, this might be considered reasonable - except JPMorgan, which hasn't been hiring nearly as much in Europe this year, increased its EMEA investment banking revenues 19% over the same period.
Citi's overall results look a little weak too. Fixed income revenues for the first nine months are down 16% year-on-year (up 6% at JPMorgan); equities revenues are down 13% (up 12% at JPMorgan); M&A advisory revenues are up 0.4% (up 34% at JPMorgan); and ECM and DCM revenues are down 8% and 3% (down 8% and up 6% at JPMorgan). Both Citi and JPMorgan's results in the third quarter were boosted by DVA gains (the reduced cost of buying back their own debt) which accounted for nearly 30% of revenues their investment banking businesses.
Citi could clearly argue that its new hires are bedding in and will only really start impacting the top line in 2012. However, the pressure is clearly on.
"If someone is not delivering over a 1-2 year period they will be let go," said one head of recruitment last week. "You don't want a bad banker in a bad market."
