Morning Coffee: Top banker says 20-somethings are way too stressed. Doom in fixed income
This month's British election helped highlight the growing discontentment among young people, a high proportion of whom voted for opposition leader Jeremy Corbyn. Now a senior banker says he feels the pain of today's youth.
Bill Winters, the American born, London-based, CEO of Standard Chartered, told CNBC that millennials are having a hard time.“I think the pressure on young people, whether it's in the student phase or the earlier phase is absolutely phenomenal,” he said. “I think we're at risk of damage to young people.”
While Winter’s comments weren’t directed specifically at young bankers, they will no doubt receive a cautious welcome among Stan Chart’s junior ranks. For one, he seems to be talking work-life-balance, not 80-hour weeks. “I would encourage 20-year-olds to be reasonable in terms of expectations, but never lose that sense of control of your own life.”
Winters also appears to cast doubts on the traditional 20-something banking career model of relentless performance and achievement propelling bankers from analyst to associate and beyond. Winters instead believes young people are focusing on “success” so much that their expectations are becoming “almost impossible” to achieve. In this, he echoes Lloyd Blankfein, the CEO of Goldman Sachs, who's been saying for a while that today's students need to chill out. “To succeed, you have to be a complete person. In the early part of your life you should focus a lot on being a complete person,” said Blankfein in 2013.
Separately, a year that began with high hopes for fixed income salespeople and traders is now turning nasty. Take Jefferies’ newly published fiscal second quarter results, which reveal a startling 33% fall in quarterly bond-trading revenue to $158.6m.
While Jefferies may be a small(ish) bank and its fixed income slump may be at the extreme end, the concern is that its results are a microcosm of the job function as a whole. Only last week, banking analysts from J.P. Morgan predicted that FICC revenues across the banking sector will be down 5% in 2017 compared with last year. And their counterparts at Deutsche Bank noted that banks’ credit trading businesses are under pressure.
The revenue decrease at Jefferies follows four quarters of rises in fixed income at the bank. “Lower volumes and lower volatility prevailed throughout much of the quarter,” CEO Richard Handler and Brian Friedman, chairman of the executive committee, said in a results statement. Translation: the benefits of Trump and Brexit volatility are wearing out for fixed income traders.
Fixed income teams are also suffering at some of the larger banks, which report results next month. J.P. Morgan, Bank of America and Citi expect their overall Q2 trading revenues to fall at least 10%, driven by declines in fixed-income, according to Bloomberg.
Even as most global banks say they will cut British jobs because of Brexit, HSBC has just announced huge new plans to hire in the UK – albeit for middle and back-office roles in Scotland, not front-office ones London. The bank is recruiting 500 new people there in just the next six to nine months, including for its Edinburgh-based global risk operations. (The Scotsman)
Goldman's offering partnerships to new hires. (CNBC)
Goldman Sachs CEO Lloyd Blankfein on why he tweets – it’s partly about standing up for bankers: “I kind of have to be the champion of our people and I kind of owe it to the body politic to comment where I have expertise. They could take my advice or not. I don't make decisions, but I do give them our expertise.” (CNBC)
Five things to know about the Barclays fraud case. (BBC)
Deutsche Bank poaches new head of insurance investment banking from Morgan Stanley. (Intelligent Insurer)
Goldman Sachs hires two bankers for its business-services coverage group. (The Street)
These ex-Goldmanities want to reinvent the gold market. (WSJ)
This is the future of technology, says BoA chief operations and technology officer. (Forbes)
British politician stand ups for banking jobs during Brexit talks. (Bloomberg)
This is where Citi wants to grow. (WSJ)
Citi hires in California. (Stockhouse)
Behold SocGen’s five Brexits. (Business Insider)
Work for Goldman Sachs, not a start-up. (Quartz)
Why we speak in jargon at work. (Guardian)
Image credit: Phil Ashley, Getty