Was VTB Capital the best retirement trade of recent times?

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If you wanted to make enough money to retire from banking and do something completely different, should you have spent the past few years working for VTB Capital? Several headhunters suggest that you should indeed.

We spoke to three search firms who said that VTB Capital's International business was one of the best payers in the market throughout its counter-cyclical expansionary period, which lasted from approximately June 2011 when ex-Goldman banker Atanas Bostandjiev arrived, to approximately December 2013, when Bostandjiev unexpectedly recommended that VTB make 40% of its recently-hired international staff redundant. 

"VTB hired a lot of people who wanted to pick up a massive guaranteed pay check, paid mostly in cash," says one headhunter who formerly worked for the firm, speaking on condition of anonymity. "They were usually bidding around 30% above other European houses," alleges another headhunter. "But they typically paid less than the big U.S. banks." Another headhunter, also speaking off the record, says VTB paid its staff up 30-40%.

VTB didn't respond to our requests for comment on its allegedly gigantic pay packages. As was reported last week, Bostandjiev is now leaving VTB.  He's being replaced by Nick Hutt, the previous CFO, who will take over as interim CEO until a new leader is found. In a statement released by the bank, Bostandjiev said his exit was a, "planned decision" and that he will now be taking his experience to, "new opportunities."  It's not clear whether Bostandjiev's suggested cuts will be implemented following his exit, but something needs to be done. In the year ending December 2013, profits at VTB Capital plc, the UK-registered international business, plummeted to $4m, down from $34m one year previously.

Headhunters claim that Bostandjiev brought across several ex-Goldman colleagues to work with him. They include Dimitrios Kavvathas, a former Goldman partner, who joined VTB's Hong Kong office in October 2013 as head of global markets for the Asian Pacific region. In London, the FCA Register suggests that VTB only counts three ex-Goldman employees among its current registered staff, including Felipe Berliner, an ex-Goldman ED, Philip Hamilton, global head of fixed income sales, and Bostandjiev himself (still). However, VTB's staff list reads like a roster of ex-big name bankers, with many of its 133 approved persons drawn from places like JPMorgan, Citigroup, Credit Suisse and Morgan Stanley.

"They were paying well, but for a while VTB was also an interesting opportunity," says one headhunter. "You have to remember that 2012 and 2013 everyone was hunting for yield and emerging markets were the best places to find them. VTB was appealing because it's a big player on the Russian bond market and was aggressively going for growth."

Pay certainly looks like a good reason to join VTB though. Accounts for the year ending December 2013 show that VTB Capital paid its 443 employees an average of $503k (£295k) per head. This makes it more generous than Goldman Sachs, which paid a mere $383k per head over the same period. Moreover, while Goldman cut pay per head by 4% last year, VTB hiked it. Pay at the bank rose by an average of 27% per person in 2013, even while profits plummeted.

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