Morning Coffee: Deutsche Bank's secret plan for cutting staff. The most unruly place to work in finance
You have to give credit to John Cryan. All this time he's been wandering about, carrying a battered briefcase and seeming dour for a reason. Cryan, whose nickname at Deutsche is reportedly "Mr Grumpy" has a plan: he wants Deutsche's investment bankers to quit of their own accords.
He said as much during yesterday's call with investors. "We expect some people to give up the fight," said Cryan, claiming that employee morale is suffering from falling revenues and plummeting pay.
Encouraging voluntary exits is a dangerous game. There's always a risk that you'll lose your best and most mobile staff, and with market share plummeting in equities and M&A, this is something Deutsche can ill-afford. On the other hand, voluntary exits make perfect sense: they alleviate the need for redundancy payments and cost nothing at all. With headcount at Deutsche's investment bank rising by 9% last year and Deutsche historically ranking as one of the most generous banks when it comes to severance pay, Cryan has a need to cut heads cheaply. What better way than depressing people into taking their leave after bonuses are paid?
Separately, if you were wondering how things hang in the outer reaches of finance, where people don't have hedge fund fathers and impeccable exam results, you need look no further than Bloomberg's profiles of the inter-dealer brokers who've just been cleared of helping Tom Hayes manipulate LIBOR. Going by names including, 'Big nose', Sarge and ASBO [Anti-social behaviour order], none of the six men have the sorts of elite backgrounds that have become commonplace in banking. Instead, they come from London's East End and left school as teenagers. They were making good money though - one (Sarge) was paid as much as £1m ($1.44m) a year for running ICAP's swaps desk and still had time to be part of a 'dance music collective' known as Helskini V, which performs at raves whilst wearing lab coats.
John Cryan: "The bank I would like to run at the moment is Wells Fargo. I would love to make 400 basis points in retail banking and have a relatively easy life." (Dealbreaker)
John Cryan again: “Sometimes I go home in the evening and I say to my wife, ‘I wish some people would actually think I had some talent for running a company and not just cleaning it up.’ (NY Times)
Amanda Stavely is seeking no less than £950m in damages from Barclays. (Financial Times)
Morgan Stanley quietly dismissed a group that invested in technology for its equities division. (Reuters)
J.P. Morgan wants to increase headcount in Saudi Arabia by 10%. (Business Times)
Citigroup FX trader who was dismissed while on maternity leave says she was 'cannon fodder.' (Bloomberg)
Why Treasury traders get no sleep. (Bloomberg)
With this simple question, you will unmask a narcissist.(Psychology Today)
It’s hard to succeed in Silicon Valley when you grew up poor. (Vox)
What to say when people cast aspersions upon your hedge fund father. (Twitter)
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