RBC Capital Markets could throw Barclays' unwanted traders a lifeline
Barclays is making 7,000 of its investment banking staff redundant over the next three years, with 2,300 redundancies to take place annually between now and the end of 2016. Senior front office fixed income salespeople and traders are likely to go first. Technology and operations staff will follow. Already, a rival bank has said that it might be interested in picking off Barclays' unwanted.
Insiders at RBC Capital Markets say the bank is in the process of a "strategic build" of its London-based fixed income sales and trading business. Rates and inflation trading are said to be particular areas of focus, with hires already in the pipeline and others to follow later this year.
RBC didn't respond to a request to comment on the issue. The bank made several senior fixed income sales and trading hires in 2013, including Sian Hurrell, a rates specialist from RBS who joined as head of fixed income and currencies sales, Mike Foster from Credit Suisse as head of central bank sales, and Alistair Hollingdale from Brevan Howard as head of European rates trading. Hurrell, Hollingdale and Foster are said to be upgrading their teams.
Earlier this week, Financial News reported that RBC is moving into phase two of a hiring push that began in 2009-2010. This new phase will be focused on adding investment bankers in healthcare and TMT, the paper said, with supporting equity researchers in those sectors. Financial News subsequently reported that RBC had hired a team of five telecoms analysts from Barclays' Investment Bank.
RBC already employs few other ex-Barclays fixed income bankers in London. Sean Taor, head of European debt capital markets at the Canadian bank, spent 18 years at Barclays before joining RBC in 2010. Dipesh Patel, a former Barclays' vice president in cross asset sales, joined RBC in January 2014.
Barclays bankers who join RBC may find it a very different environment, however. Until now, Barclays has been one of the global market leaders in fixed income sales and trading, with a market share of around 5%. Even in the disastrous first quarter of 2014, Barclays managed to generate FICC revenues of £1.2bn. RBC Capital markets is a far smaller affair: its FICC revenues amounted to $571m Canadian dollars in the past quarter (£311m). However, while Barclays' FICC revenues fell 40% year-on-year in the first quarter, RBC's rose - they were up 8%. This, at least, looks like a good reason to join the Canadian bank.