Morning Coffee: BAML bankers weep over deferred bonuses. Banks rebrand as 'meaningful' places to work
If you see a fellow finance professional from Bank of America Merrill Lynch (BAML), treat him or her gently. Take especial care if that BAML banker happens to be quite senior and has a lot of his recent compensation tied up in deferred stock: the value of those deferrals has plummeted 20% since March.
Most U.S. bank stocks have had a bad few months, but Bank of America's stock has performed particularly badly. Whilst it's off 20% from its mid-March peak, Goldman's stock is down only 4% over the same period, Citi's is down 8%, Morgan Stanley's is down 9% and JP Morgan's is down 11%. Why is this? Bank of America is more exposed to the struggling U.S. consumer reportedly. Erroneous calculations regarding its regulatory capital needs in mid-April didn't help. None of this seems to make BAML a particularly appealing place to work if you're expecting a big deferred bonus. Not that this seems to have dissuaded recent big name hires like Michele Foresti from Deutsche Bank.
Separately, Goldman Sachs and Morgan Stanley are among the U.S. banks putting themselves out there as meaningful places to work. Goldman's career page now opens with the words, 'The work you do will have a direct effect on the business and the community. The work you do here will make an impact.' And Morgan Stanley has reportedly been recruiting students in the UK by encouraging students at various universities to get involved in local sustainability projects. Teams of six to eight students compete to win a £5k donation from Morgan Stanley by helping local charities improve their 'sustainability issues.' 70% of the students participating in the scheme applied for Morgan Stanely's internships afterwards, making this a novel way to attract people into banking.
Only two out of 15 board directors at Morgan Stanley are women. (WSJ)
George Soros cut his holdings of bank stocks in the first quarter. (Bloomberg)
Lloyds says it had to pay 200% bonuses to retain its talent. (IB Times)
Deutsche Bank’s ex-CEO says banks’ culture is being seriously changed by technology: “It feels like what you type is gone, not documented, just somewhere on the computer. People don’t understand that a hard drive is permanent, hence the name.” (Bloomberg)
The glitzy Ark hedge fund charity event is no more. (Telegraph)
Paul Tudor Jones says the younger version of hedge fund managers are too rational and don't go enough by instinct. (Capital Mind)
“The culture at [RP Martin] was that profit came first. Compliance was seen as a hindrance. In this environment, broker misconduct was almost inevitable.” (The Times)
The IT project that brought a bank to its knees. (HBR)