These bankers do, and don't, deserve to be paid so far for 2013
Most large banks have now announced their results for the first quarter of 2013. On the whole, their performance wasn't too bad. However, nor was it too good - especially in fixed income, currency and commodity trading, where revenues declined a lot.
Figures below, from Nomura analyst Jon Peace, show the comparative revenue performance of different banks' various business areas in the first quarter of 2013 versus the first quarter of 2012.
Conclusion: based on their first quarter performance, fixed income salespeople and traders at Morgan Stanley and Bank of America deserve atrocious pay. So do equities traders at Morgan Stanley. However, equities people at Barclays and M&A bankers at UBS should be handsomely rewarded.
The figures should be a source of reassurance for senior M&A bankers everywhere. Last year, Credit Suisse culled up to 33% of its investment bankers at managing director level in Europe. As a possible result, it was the worst performing bank in M&A in the first three months of 2013.
In fixed income, currencies and commodities, the average change in revenues year-on-year in the first quarter was a 12% decline. In equities, there was a 1% decline. In M&A, there was a 17% increase. To the extent that revenues are an accurate gauge of performance and market share, here's who should get paid...
The most deserving:
Who deserves to be paid in fixed income sales and trading (year-on-year percentage changes in revenues, in home currency):
People at UBS: 2% increase (on a like-for-like basis)
People at Citigroup: 3% decline
People at JPMorgan: 5% decline
Who deserves to be paid in equities sales and trading (year-on-year percentage changes in revenues, in home currency)
People at Barclays: 19% increase
People at Deutsche Bank: 12% increase
People at UBS: 11% increase
Who deserves to be paid in M&A (year-on-year percentage changes in revenues, in home currency)
People at UBS: 44% increase
People at Goldman Sachs: 36% increase
People at Citigroup: 22% increase
The most undeserving:
Who doesn't deserve to be paid in fixed income sales and trading (year-on-year percentage changes in revenues, in home currency)
People at Morgan Stanley: 44% decline
People at Bank of America: 20% decline
People at Deutsche Bank: 14% decline
Who doesn't deserve to be paid in equities sales and trading (year-on-year percentage changes in revenues, in home currency)
People at Morgan Stanley: 19% decline
People at Goldman Sachs: 17% decline
People at Citigroup: 10% decline
Who doesn't deserve to be paid in M&A (year-on-year percentage changes in revenues, in home currency):
People at Credit Suisse: 3% increase
People at JPMorgan: 4% increase
People at Deutsche Bank: 6% increase
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