Morning Coffee: Top equities banker likely poached for gigantic sum. Investment bank has 900 new hires to go
In the latest sign that banks are investing in money in top people after bonuses have been paid, Phil Allison, the global head of cash equities at UBS, is departing the Swiss bank. Allison is reportedly staying in the industry, suggesting he’s been poached by a rival firm in expansionary mode. If so, he is not likely to have come cheaply at all.
Allison joined UBS as a graduate 16 years ago and was instrumental in developing the bank’s equities sales and trading business. He leaves on a high note: last year, UBS’s equities business was the top performer globally, with revenues increasing 60% on 2012. Allison also leaves UBS with a significant hole to fill – as we noted in February, UBS’s equities business has become its defining franchise since the bank pulled out of fixed income, currencies and commodities trading in 2012. For the moment, UBS is plugging Allison’s gap with two other of its lifers – Jason Barron and Dominic Vail – both of whom have spent 20 years there.
Allison’s destination outside UBS remains unclear. But as equities revenues grow, plenty of banks have an interest in expanding. JPMorgan has stated its intention to hire in equities, and needs to improve its electronic trading capabilities - an area where Allison could clearly help. Citigroup has lost staff from its equities business and may be interested in upgrading. Bank of America's equities sales and trading business also had a good 2013, and the bank has revealed a willingness to make big trading hires in recent weeks. Any bank recruiting Allison will need to buy out a significant amount of UBS stock and to make it worth his while leaving a familiar franchise that's growing fast. His move is a reflection of the health of the equities hiring market.
Separately, BNP Paribas is in expansion mode. At yesterday’s investor day, the French bank said it wants to increase its corporate and investment banking revenues by an average of 6%+ a year. Much of this growth is expected to come from Asia, where BNP announced last year that it plans to recruit 1,300 staff by 2016. So far, it’s only recruited 400, meaning it has another 900 Asian hires to go. Anyone joining BNP should not expected to be paid on a par with the most generous US and European banks, however. In an interview yesterday with the Financial Times. BNP chief executive Jean-Laurent Bonnafé, remonstrated with other European banks for overpaying their staff and predicted that compensation in banking will fall as profit margins are squeezed.
BNP Paribas is cutting 1,600 jobs in Ukraine. (Reuters)
Macquarie becomes only bank to say fixed income sales and trading is growing. (Bloomberg)
Citigroup is making Richard Bibbey head of both voice and electronic FX trading. There wasn’t a combined head before. (Financial News)
How rich are you (compared to everyone else)? (Telegraph)
Should you write articles for Seeking Alpha as a way of getting into banking? (Wall Street Oasis)
Someone needs to show Goldman Sachs how to upload a photograph to Twitter. (City Am)