Morning Coffee: Bank laying-off 1,000s wanted to hire "better" people. Redundant banker happy to be fined $300k

Greg Guyett, the ex-JPMorgan banker who now runs HSBC's UK investment banking business, is at least blunt. When he spoke to Financial News last month, Gruyett said HSBC wanted to, "hire better investment bankers with deep relationships with the decision-makers – the CEOs and chairmen – with those clients that are high-priority targets.” He wasn't quite blunt enough to say so, but the implication was clearly that the newly-hired bankers would be better and have deeper relationships than the incumbents.

Fast forward two weeks, and the Financial Times reported that HSBC's interim chief executive, Noel Quinn, wants to cut 10,000 people with a focus on chopping highly-paid roles in Europe. Eight thousand of the cuts will come from dispensing with the French retail business, but as we noted at the time, it sounded a lot like Quinn will pursue HSBC's directors and managing directors in London for the remaining 2,000. Subsequent reports added a pullback from equities in London, New York, Germany and France to the mix. 

Headhunters say HSBC's London investment banking redundancies have already begun, although it's not yet clear who's leaving as most of those affected are still in the UK's legal consultation period. Yesterday, Financial News reported that Rob Ritchie, the ex-Goldman Sachs banker who led the UK investment banking business for two years, had quit (seemingly voluntarily) after HSBC slipped to ninth for UK investment banking revenues in the first nine months of 2019, from fourth in the same period a year earlier. 

The question now, then, is whether Gruyett will get to fulfill his declared intention of hiring some better bankers instead, or whether this has been superannuated by Quinn's cost-cutting drive. For the moment, it seems that Gruyett is content with shifting his best staff internally. In September, Julian Wentzel was relocated from South Africa as 'head of global banking UK and international Europe' (a new role which seemed to precipitate Ritchie's exit). FN reports that ex-Goldman Sachs banker Peter Enns is off to Hong Kong to head HSBC's business in Asia, and that Ray Doody, who was hired from JPM in January 2017 as global head of leveraged and acquisition finance will be relocating to New York in his current role as co-head of capital markets. Doody, at least, has a mandate to hire - he reportedly wants to recruit 20 people for his new team in the U.S.

Firing and then hiring - usually after a seemly delay - is nothing unusual in banking and HSBC is unlikely to be alone in its pursuit of selective upgrading, if this indeed is what it decides to go for. After a year of aggressive redundancies across the market, it could make the 2020 hiring season more laser-focused than usual: many will be looking for jobs next year; only the very best will get them. 

Separately, if you've lost finance job and are spending your days playing golf or pruning roses, paying a $300k fine might seem a bit of a shocker - unless the alternative was going to prison. Bloomberg reports that Matthew Connolly and Gavin Black, two ex-Deutsche Bank traders who were convicted last year year of manipulating LIBOR, were granted a reprieve by a judge in Manhattan yesterday who said she declined to make them, "scapegoats for the entire industry,” and that,"the government has used Mr. Connolly and Mr. Black ... as proxy wrongdoers.” The men are being fined $100k and $300k respectively instead.

Meanwhile:

Awkward questions for Sergio Ermotti as it's alleged that he knew about illegal Cum-Ex tax trade deals in his previous role at UniCredit. (Bloomberg) 

Deutsche Bank's new U.S. boss Christiana Riley says unbridled expansion is over for the banking industry and it's time to "pick your battles," instead. (Financial Times) 

Ignore the Goldman Sachs' partner 'exodus': it happens every year. (Bloomberg) 

Martin Weber, who ran Goldman's finance division in MENA, has been dismissed for compliance violations. (Gulf News) 

Peter Hornick, the head of business development at ExodusPoint, the hedge fund which hired all those people last year, is leaving. Hornick was directly responsible for recruiting investment staff. (WSJ)

Germany has got a sovereign wealth fund called Kenfo and it's about to diversify into unlisted assets. (Bloomberg) 

A reminder that bankers in the past 'rarely worked and instead spent their days mastering nonproductive tasks as social signifiers of their wealth.' (Vox) 

Google employees think management is spying on internal dissent after the company created a new tool for employees' computers that automatically reports anyone who creates a calendar event with more than 10 rooms or 100 participants. (Bloomberg) 

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