Morning Coffee: The great Barclays equities reversal. Deutsche's pay pain could go on
Remember when Barclays cut 30% of its equities staff in December 2015? Recall that it let its head of EMEA cash equities Neal Hallett go in February? Well, it's building again! Albeit to the tune of 20 people across sales, trading and quants (note, not research).
CEO Jes Staley continues to back the investment bank while some rivals retreat to focus on other business lines. The British bank plans to recruit more than 20 staff this year to bolster its equities trading business, according to Bloomberg. Barclays currently employs about 450 people in its Europe, the Middle East and Africa equities business, which is run by Rich Evans.
Let's not forget that Tim Throsby is now at the helm of Barclays investment bank. An equities man through and through, having previously headed up J.P. Morgan's equities business, he was always likely to want to make some more key hires to turn it around. The build out in equities is part of a broader plan to revamp the corporate and investment bank under Staley, which had been losing revenue and market share to surging U.S. rivals.
Staley’s predecessor Antony Jenkins publicly expressed doubts that the securities unit could generate sufficient returns, putting its future into doubt. Staley rejected demands to spin off the investment bank, but he did make thousands of job cuts worldwide and closed the cash equities business in Asia to refocus on London and New York.
In the fourth quarter of last year, Barclays posted a 29% increase in equities trading income to beat analysts’ estimates but could only muster a 33% increase in fixed-income trading revenue compared to the average 43% uptick reported by U.S. investment banks.
Barclays’s decision to add to its ranks of traders is in stark contrast to its European rivals, including Deutsche Bank, whose CEO John Cryan plans to cut 17% of the bank’s equities traders and 6% of fixed-income traders. Credit Suisse CEO Tidjane Thiam intends to lay off 6,500 employees this year.
Separately, Deutsche Bank employees want one particular Barclays analyst to shut up already.
After suffering a net loss of €1.4bn last year, the German bank shrank its 2016 bonus payouts by 80%, and Kiri Vijayarajah, an equity research analyst specializing in European banks at Barclays, wrote that Deutsche Bank must continue the austerity even as its investment banking revenues improve, certainly not what its bankers wanted to hear.r.
The Barclays analyst predicts that Deutsche Bank's FICC revenues will rise 26% year-on-year, contributing to an 18% rise across the entire investment bank, but he warned that the bank needs to continue its efforts to keep costs down, Financial News reported.
Kerri Saperstein, a precocious twenty-something bond trader who ran one of Goldman Sachs’ five high-yield market-making books, is taking on a similar role at Morgan Stanley. (Business Insider)
U.K.-based fund manager Schroders is buying Adveq, a $7bn Swiss private equity firm. (Financial News)
French bank BNP Paribas is merging two research teams and may cut a dozen jobs or more worldwide. (Reuters
Wall Street women have been talking about advancing in their careers and getting pay raises, but City women have been quieter. (WSJ)
Citigroup has promoted a former McKinsey consultant who is a member of the bank’s operating committee and its head of productivity to lead global retail banking and mortgages, as it continues to shift toward new digital services. (WSJ)
Virtu is buying rival KCG for $1.4bn, and employees of both firms have reason to worry. (FT)
UBS has washed its hands of its football-field-size trading floor in Stamford, Connecticut – once the largest in the world – after defaulting on the mortgage. (New York Post)
About a third of 18- to 34-year-olds in the U.S. live at home, and among 25- to 34-year-olds living at home, one in four is neither enrolled in school nor working. (Bloomberg)
Slow, outdated computers and intermittent internet connections demoralize workers, and it’s even a problem in the City of London. (Bloomberg)
The dress code at City banks is still quite regimented, much to the chagrin of millennials. (Business Insider)
How Wall Street job seekers should handle salary history requests. (WSJ)
Robert De Niro on playing Bernie Madoff in the HBO docudrama The Wizard of Lies. (Bloomberg)
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