Morning Coffee: The most patronising thing a male banker has ever said to a female colleague, and the danger roles at Deutsche Bank

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It’s not exactly calculated to calm things down

Telling a female colleague that she needs to “focus on the baby” rather than her work is a pretty demeaning thing to say at any time.  As a response to a complaint about a policy of systematically reducing the bonuses of women who take maternity leave, it’s pretty jaw-dropping.  Remarks like that apparently “have no place in UBS culture”, which is a problem as it was one of their managers which said it, as well as offering the equally unhelpful advice that being a working mother was a “lifestyle choice”.

This particular approach is apparently in place at the Swiss bank’s domestic wealth management business.  UBS offers a relatively generous maternity leave – seven months, compared to the fourteen weeks required by Swiss law.  But women who take maternity leave see their bonus entitlement for the year reduced pro-rata for the weeks they take off (which sounds potentially fair enough, except that no similar reduction is made for fathers who take their equally generous paternity leave, or for men who take time off to do their Swiss Army service).

These 'mummy bonuses' are a problem. Because it’s a wealth management culture rather than an investment banking one, your bonus at UBS in Switzerland tends to be set based on seniority, the divisional pool and last year’s amount, with a somewhat weaker link to individual performance in a particular bonus year.  That means that a loss of bonus for the maternity leave period rebases things downward, and that women who take time off will find it very difficult to get back on their old progression or catch up with male colleagues.  UBS women have formed a group to protest against this policy, resulting in some of the charming (alleged) remarks from managers detailed above.

It’s probably no coincidence that this happened in the Swiss domestic business rather than anywhere else.  Although telling women to stay home and enjoy their babies isn’t part of the UBS way, it is still somewhat acceptable in Swiss culture – a recent government study found that ten per cent of Swiss mothers had suffered some form of employment discrimination, and it’s not unknown for female bankers to be quizzed at job interviews about their family plans.

What this really looks like, then, is one of those things which makes working in human resources such a tricky job; you can – and UBS has – set modern and enlightened polices in place for things like maternity and paternity leave, but their everyday operation on the ground has to be carried out by line managers, and that’s where all sorts of fun and games can sneak in.  UBS has apparently promised to eliminate this policy last year, but according to several employees, the management of the domestic wealth management unit haven’t necessarily got the message yet.  If you’re ever tempted to sigh at the start of March every year when the building gets decorated in “International Women’s Day” posters, that’s what they’re for.

Elsewhere, after the news that the Commerzbank rumours were well-founded, and a bonus season which hardly inspired confidence, it’s likely that Deutsche Bank employees will be thinking about their personal futures.  Where are the risks highest?  There has been a lot of talk about the equities division, with its run of losses and indeed, Brad Kurtzman, the global co-head of equities, appears to have already bailed out.

But might Christian Sewing be thinking even bigger?  If you shut down the equities franchise – or even if you didn’t – the rest of Deutsche’s North American businesses look like marginal players, operating at that “bottom half of the top ten” scale which is known to be the least viable space in the investment banking industry multiverse.  Given its known problems with US regulators and the capital consumption of the Level 3 assets, people are making the case that Deutsche, if it wants to stay independent, might plan to abandon the Wall Street franchise altogether and return to being a European domestic player.  That would free up capital and improve profitability in the short term, possible allowing the bank to boost its share price and think about consolidation from less of a position of weakness. Beware.

Meanwhile ...

It almost sounds like the plot of a buddy movie – they served together in the Royal Dragoon Guards, then they worked together at UBS, now fate has thrown Peter Luck and James Robertson together once more, as co-heads of investment banking at Bank of America in London.  Could this strong personal back-story contribute to one of the few occasions in the history of banking when a co-head structure has worked? (Financial News)

Something of a backward looking indicator, but London is still, according to analysis of regulatory “meaningful risk taker” data, where the overwhelming majority of seven figure compensation packages are paid in Europe. (FT)

Citigroup is setting up a fourth trading hub for FX in Singapore, to reduce latency for Asian clients.  This looks like a trend as UBS has done the same thing. (Bloomberg)

The Goldman Sachs dress code changes are paying off already – they’ve won the mandate for the IPO of Levi’s.  No record of whether anyone wore double denim to the pitch meeting (Financial News)

The investor letter from Lansdowne Partners is reasonably representative of a terrible year in 2018 for the hedge fund industry overall (FT)

And rumours suggest that the bonus season at Wells Fargo’s wholesale markets unit was one to forget (Dealbreaker)

The BNY-Mellon ban on working from home policy has been – possibly temporarily – reversed, after a significant backlash from staff, some of whom seem to have believed that it was a ploy to make employees quit if they relied on it. (Financial News)

Could the eventual destination of Deutsche, if the Commerzbank talks put it in play, be as a subsidiary of BNP Paribas? (Breakingviews)

Making jokes during a presentation makes men look confident, relaxed and leaderly, but trivialises women (Harvard Business Review)

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