Morning Coffee: Bank's Brexit layoffs begin, and they're not all in London. The 'Goldman accent'
It has begun. A bank has made some layoffs and implied that those layoffs might have something to do with Britain voting to leave the European Union. That bank is UBS.
Andrea Orcel, chief executive of UBS's investment bank, reportedly sent a memo yesterday saying that the Swiss bank is, "in a period of dislocation -- a perfect storm of challenges and changes from regulation, competitors and markets." In the circumstances, Orcel said UBS needs to make its investment bank, "more streamlined and efficient." To this end, it's done away with three senior executives: Roger Naylor, the co-head of equities; Chris Murphy, the co-head of fixed income, rates and currency; and Matt Hanning, a regional head of corporate client solutions.
In a sign that any fallout from the difficult conditions created by Brexit may not be UK-specific, Naylor and Murphy were both based in London, but Hanning - an Australian, was UBS's most senior banker in Hong Kong.
Earlier this week, one consultant working with banks in London, predicted that post-Brexit layoffs would begin slowly with senior staff placed into early retirement before becoming more widespread in the autumn. "“I can’t promise you that it will all be smooth sailing from now on,” declared Orcel in his memo.
Separately, Euromoney notes that Michael Sherwood, co-head of Goldman Sachs in Europe, spoke to MPs yesterday in a 'Goldman accent'. What is this? Euromoney doesn't elaborate, but Sherwood's intonation is a melange of Manchester, Manhattan and Muswell Hill, so you might want to try that if you're interviewing at Peterborough Court.
Co-head of Goldman's European investment banking division: "If passporting was totally removed, we would have to adjust our footprint and where people were located." (Financial Times)
Mifid II, which comes into force in January 2018 crucially contains new "passporting" rights that allow non-EU firms abiding by broadly similar rules to offer their services in the EU. (Financial News)
Columbia Threadneedle confirmed in a statement on June 29 that it had started the process of applying to expand its Luxembourg operation, placing investment staff on the ground in mainland Europe for the first time. (Financial News)
Brexit will undo 20 years of growth in the City of London. (NY Times)
Francois Hollande: "“The City, which could handle clearing operations in euros thanks to the U.K.’s presence in the EU, won’t be able to do them any more.” (Bloomberg)
"We're not seeing the kind of stress we saw in the Lehman days. The fall in bank shares is an earnings issue, not a funding issue." (Reuters)
Barclays: “We had a crisis leadership structure in place, we stood that down yesterday." (Telegraph)
Deutsche Bank has tanked since the June 23 vote, falling to the lowest level since Germany's DAX stock index was established in 1988. (Bloomberg)
"It makes sense as a bank to look at where you'd stand in the worse case scenario and then work out what you'd do to plan around that, but it's not the time to start shifting half of your business to France." (CityAm)
It's not just Europe: M&A is slowing over fears of Trump. (Financial Times)
It’s not a good time to work for an equities hedge fund. (WSJ)
'Many international professionals already thinking of leaving #London and move elsewhere. Not bc of legal status, bc they no longer feel home.' (@Macrocredit Twitter)