Morning Coffee: Goldman Sachs bankers are going to Paris for the summer. The big banks in bear territory
August in Paris is usually quiet. The Parisians themselves have followed the sun to beaches further south and the tourists are thronging at the principal sights. Away from the hot spots, cafes are closed and there's a pervasive ennui: August is not a month for work.
Try telling that to bankers from Goldman Sachs. Summer or not, they are about to arrive in Paris. And they are not known for lazing around.
Richard Gnodde, head of Goldman Sachs International, said yesterday that Goldman plans to move "tens" of London bankers to Paris by the end of this month. In the next three to five years, Goldman plans to double the size of its banking teams in continental Europe, Gnodde told Les Echos, with Paris a city of particular focus.
Naturally, Brexit is to partly blame. Gnodde said he regretted the uncertainty caused by the UK's decision and that Goldman needs to protect its ability to do business in continental Europe. But Brexit's not the only perpetrator: Gnodde said Goldman's reinforcement of the Paris office has its "own logic," too. French president Emmanuel Macron's policies have the potential to benefit Goldman's clients, said Gnodde: they make France a more attractive country for entrepreneurs and large corporations; Paris has become the land of opportunity. It helps that Goldman's American bankers like Paris: Goldman CEO Lloyd Blankfein said previously that the enlargement of the Paris office was partly a foil for senior American bankers in London who don't want to Frankfurt.
60% of Goldman's staff transfers from London to the EU have happened already, said Gnodde. Goldman's Paris build includes people working with clients across France, Belgium and Luxembourg, managed by Marc d'Andlau, a Goldman MD previously based out of London. As we have noted several times, Goldman has been building its equity derivatives sales team in Paris.
Paris isn't the only object of Goldman's post-Brexit affections. Gnodde said the firm also plans to expand its banking teams in Stockholm, Milan, Madrid and Frankfurt.
Goldman Sachs bankers are about to go local. Whether this means taking a full month off to visit the Mediterranean remains to be seen.
Separately, the Financial Times has identified 16 banks in "bear" territory (ie. their stock is down 20% from its recent peak). They are: Deutsche Bank, Nordea, ICBC, UniCredit, Crédit Agricole, ING, Santander, Société Générale, BNP Paribas, UBS, Agricultural Bank of China, AXA, Mitsubishi UFJ Financial Group, Bank of China, Credit Suisse and Prudential Financial. Bankers at these organizations are likely to be suffering from the diminished value of previously deferred bonuses held in the bank's stock - and may not be able to afford a long summer holiday anyway.
Somerset Capital Management, the investment house founded by arch British Brexit supporter Jacob Rees Mogg, has set up a fund in Dublin. (Financial Times)
Morgan Stanley expects to move 400-500 jobs out of the UK as company leaves the European Union. (Bloomberg)
Morgan Stanley is to move its European investment management division from London to Dublin (involving 500 jobs) as it adapts to Brexit. (Citywire)
Morgan Stanley was intending to make $1bn a quarter from its fixed income trading business. After making $1.9bn in the first quarter, it thinks this target may be too modest. (Bloomberg)
Daniel Pinto. head of J.P. Morgan's corporate and investment bank, says the landscape globally is "very competitive." : “I think because by now, most banks have adjusted to the new reality, having exited what they wanted to exit and restructured largely what they wanted to restructure...Whatever shift in market share took place in the past (from Europeans to Americans), it’s likely to stabilise because we (as an industry) are no longer in the restructuring mode, we are in the business as usual mode.” (Financial Times)
J.P. Morgan has got a new regional investment group in the U.S. It's comprised of 60 bankers who help deliver complex underwriting or merger advice typically reserved for larger corporations to smaller clients from regional, including Atlanta, Dallas, Seattle, and Chicago. The bank is busy interviewing juniors to fill some of the roles. (Business Insider)
Competitive mindfulness. (WSJ)
Fancy handbag. (BBC)
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