Citigroup, Cheuvreux, Nomura: equity bankers face the chop
2012 was a bad year for cash equities jobs. Unfortunately, 2013 is continuing in much the same mould. Headhunters say Citigroup will make many of the cash equity redundancies it promised last December in the next few weeks. Cheuvreux is also said to be in the process of dismissing large numbers of equities bankers following its merger with Kepler Capital markets. And there are lingering fears for Nomura's cash equities business.
None of the organisations above was able to comment on the alleged redundancies. Citigroup and Nomura declined to comment, and a spokeswoman for Cheuvreux said the bank doesn't comment on, "rumours or speculation."
If Citigroup does make cash equities redundancies soon, it will mark the continuation of a trend. Between April 2009 and February 2012 the US bank built its London equities headcount up from 138 to 297 people, according to figures from the London Financial Services Authority (FSA). Since then, it has trimmed equities staff on a month-by-month basis, so that headcount now stands at 244. More cuts are likely: last December, Citigroup announced 1,900 redundancies across the investment bank, of which it said up to 950 jobs would be removed from areas of low profitability, 'like cash equities.'
Headhunters said Cheuvreux's layoffs have so far fallen mostly on its Paris office, where a significant proportion of Cheuvreux staff have allegedly been let go following the announcement of the merger with Kepler and the decision to pull back from equities. The deal is expected to be finalized by the end of April. In London, headcount at the FSA registered 'Cheuvreux Agricole International' has remained stable since mid-2012, but the City may be next in line for cuts. "Kepler staff are expected to come out best from this deal," said one equities headhunter, who declined to be named. "They're clearing the decks at Cheuvreux."
Meanwhile, there are still fears for equities jobs at Nomura. As we were first to report, Nomura cut around 20 people from its London-based equity research team in March. This week, Financial News reported that Sam Ruiz, Nomura's head of European equities, was in talks about leaving the bank. A clear-out appears to be underway at the Japanese bank: Mark Rutherford and Jonathan Bowen (heads of equity sales and head of cash sales) also left Nomura in February. Last September, the bank announced plans to migrate its equities business to Instinet, the agency broking firm that pioneered electronic trading. And in January, Nomura said it was 75%-80% through its cost-cutting programme.
Some of the equities bankers who have left banks recently have found new jobs elsewhere. Citigroup utilities analyst Peter Atherton joined Liberum in March, for example. Arnaud Joan - a utilities analyst from Cheuvreux in Paris - found a new job with Merrill Lynch in London last October.
On the whole, however, headhunters said cash equities recruitment remains muted. This may change. "Cash equities revenues have been down around 15% so far this year," said Andrew Lim, an analyst at Espirito Santo in London. "Quantitative easing in the US and Japan could alter this, however - investors may move into more risky asset classes all around the world, including cash equities. If you get a revenue rebound, banks will look less overstaffed."