Morning Coffee: Citi joins FICC cull as Jamie Dimon says just a blip. How to get into banking when you're advised to become a TV repairman
Like Deutsche Bank, Citigroup is cutting jobs on the trading floor. The Wall Street Journal reports that the US bank has recently cut 200-300 jobs from its global markets business. After a difficult start to the year, most of the positions will likely have gone from Citi's fixed income currencies and commodities (FICC) business. Last week, JPMorgan reported a 21% year-on-year drop in fixed income sales and trading revenues in the first quarter and when Citi reports its first quarter results later today, the expectation is that it will report far worse.
Despite the drop, Jamie Dimon seemed sanguine about the state of the fixed income business when he discussed JPMorgan's results. “I still put it [the weakness in FICC] more in the camp of cyclical rather than secular,” Dimon reportedly said on Friday. Long term, Dimon forecast that FICC revenues will continue to grow. For the moment, Citigroup certainly isn't making any rash moves: 200-300 job cuts amount to only 2-3% of the headcount across its global markets business.
Separately, the Financial Times spoke to Rajeev Misra, the former head of fixed income at Deutsche Bank, who hired Sajid Javid, the ex-banker who last week became Britain's new culture secretary. Javid, the son of a bus driver, was advised to become a TV repairman by his school careers counselor. Instead, having invested money in privatized utilities as a child in the 1980s, Javid read the FT in the local library, went to Exeter University and got a job at Chase Manhattan before joining Deutsche Bank. When Javid interviewed at Deutsche, Misra told the FT he was impressed because the new culture secretary had, "his feet on the ground; he didn’t have a fancy life; he called his mother every other day." Javid also had the other two ingredients usually considered crucial to a banking career: he was "smart" and he was willing to work. - Javid had "hunger," according to Misra, who allegedly paid him £3m a year.
Meanwhile:
Javid called the 1998 Russian crisis and enabled Chase to dispose of its Russian debt just in time. (Telegraph)
There were were 9,260 new job vacancies in the City in March and people were moving for pay rises of 20%. (Financial Times)
Several of the world's largest asset managers want to create their own equity trading venue. (Financial Times)
Barclays, a bank, currently offers mortgages as large as 5.5 times the borrower’s income. A wave of mortgage defaults, accompanied by falling house prices as banks try to sell repossessed houses, could cause yet another British banking crisis. (Economist)
Mohammed El Erian confirms that his daughter presented him with a list of her events he'd missed while at Pimco and says he's now enjoying spending much more time with her. (WSJ)
Steve Cohen made $262,000 an hour last year, even while he was asleep. (Guardian)
Morgan Stanley, Bank of America and Citigroup are still working out how to sidestep the European Union bonus cap. Barclays has got non-pensionable 'role-based pay,' partly in cash and partly in shares. HSBC is paying allowances in cash for most but in shares vesting over five years for the highest (Financial Times)
Sergio Ermotti's first thoughts upon being chief executive of UBS: "wow, OK, happiness." (Financial Times)
UBS will be making 50% dividend payouts from this year. Barclays and Deutsche Bank pay 33% and 25% respectively. (Financial Times)
A pedestrian who was struck fatally on the head had just interviewed at Goldman Sachs. (Gothamist)
Hedge fund manager dodged £42.6k in train fares through inappropriate Oyster Card use. (BBC)
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