Where European banks are hiring and firing on Wall Street now
European banks often walk in stride with each other when it comes to U.S. strategy, investing in similar business lines while pulling back in others as appropriate. But not this year. European banks are all over the place, hiring in areas where others are firing and vice-versa. Below are the safest and the most precarious roles for U.S. bankers at five of the largest European banks. A few surprises await.
Since taking over in 2015, Tidjane Thiam has been one of the industry’s more conservative chief executives, prioritizing steadier businesses like wealth management over more volatile units like sales and trading. That’s why it came as a bit of a shock when executives told Business Insider just yesterday that it has been hiring senior traders in the U.S. while other banks have been pruning staff.
“There’s been a willingness to reduce the experience level, reduce the seniority and dilute the talent available to the buy-side,” Paul Galietto, Credit Suisse’s head of equities in the Americas, told BI. “We think that’s a mistake.” Who knew!
One interesting point of note: the recent dismantling of Dodd-Frank by the Trump administration raised the threshold on what defines a bank as being too-big-to-fail. All the big U.S. banks are still categorized this way and need to undergo stress tests and hold back more capital. Quietly, several U.S. factions of EU banks, including Credit Suisse, fell below the new threshold, meaning they can conceivably take more risks.
Credit Suisse has also increased its global headcount in leveraged finance to 124 so far in 2018, an increase of 13% from the end of last year. Staff rose by 14% in Europe, the Middle East and Africa, and by 12% in the Americas.
Elsewhere, Credit Suisse has been selectively cutting senior M&A bankers, though the moves appear to be centered more around performance and motivation than actual headcount reductions. Still, the bank has signaled that it won’t sit on its hands when it comes to underperforming M&A bankers. The firm has let go of at least 26 directors and MDs globally since February.
Despite somewhat sustained headwinds, UBS is pursuing a “very aggressive strategy” in the U.S., according to investment banking chief Andrea Orcel. The firm wants to double the number of senior dealmakers over the next three to five years, sources told Bloomberg. Orcel’s recruitment strategy seems to mirror that of boutiques: he wants “old-fashioned” client-facing bankers with a healthy rolodex. The Swiss firm has recently hired two senior dealmakers from Deutsche Bank and one each from RBC and Bank of America. Hopefully, they’re OK with the bank’s strict new edict that M&A bankers attend near-daily client meetings.
While UBS hasn’t moved up the M&A league tables in the Americas over the last three years, advisory fees in the region did increase 30% in 2017, Orcel said.
Meanwhile, UBS is slashing headcount within its asset management unit to focus more efforts in Asia. At least 30 positions in the U.S. have been or will be eliminated, with most coming in New York. The bank also continues to make cuts across its investment banking operations unit.
Now appears a rather safe time to be working within Barclays’ U.S. operations. Chief Executive Jes Staley said earlier this month that the diverging political climates in the U.K. (Brexit) and the U.S. (tax cuts) are forcing Barclays to look toward the Americas for growth. He suggested that incoming regulatory changes that are more bank-friendly could play a role.
"To the extent that [the U.S. goes] down a different regulatory path, having the flexibility to recognize what's going on across the Atlantic…I think it's something that all of us need to consider,” Staley told the BBC. Like Credit Suisse, Barclays’ U.S. division is no longer deemed too-big-to-fail.
So far, Barclays has been doing more hiring in continental Europe as part of its post-Brexit plans. It appears the U.S. may be the next target.
It goes without saying that Deutsche Bank is a precarious place to be if you’re a U.S. banker. They are cutting 1,000 jobs in the U.S. and 25% of global equities staffers, with the U.S. taking the brunt of the punishment. Layoffs have reportedly touched prime brokerage as well.
That said, several U.S. Deutsche bankers who work outside of equities and prime brokerage recently told us they remain rather upbeat after the bank cut some of the necessary fat. Still, no one will argue that U.S. staffers at Deutsche Bank are in the catbird seat, or anywhere near it.
The U.K. bank signaled its intent to capitalize on the U.S. market by providing a 2020 return on equity target for its U.S. unit that’s six times that of last year. How they’ll pull that off is anyone’s guess, but new CEO John Flint has a background in retail banking and wealth management, suggesting you’d rather be working there than within HSBC’s fledging investment bank.
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