Morning Coffee: Bad news for traders at RBS. How Goldman Sachs is better than Deutsche
Last time RBS announced its quarterly results, RBS's traders got off comparatively lightly. Amid expectations in July that the government-owned bank was about to announce massive cuts to its markets business, the worst that happened was a change in nomenclature - what used to be known as 'RBS Markets and International Banking' was renamed 'Corporate and Institutional Banking.' Come November, however, RBS's traders may not be so lucky.
The Financial Times's Lex Column suggests RBS's traders should be fearful for their future. Earlier this week, it points out that Ross McEwan informed the Merrill Lynch banking conference that revenues in the Corporate and Institutional Banking unit (CIB) had been, "weaker than expected." This doesn't augur well. In the first half of 2014, Lex points out that RBS's CIB made a return on equity of just 2.7%, but absorbed 30% of the bank's risk weighted assets. Other banks are expected to report an improved quarter in fixed income trading. In the circumstances, RBS's weakness looks worrying - its CIB seems to be in terminal decline. Will it be snuffed out completely?
Separately, Goldman Sachs is the place to work if you're a non-stereotypical banker. Research by Vettery, a start-up recruiting firm, found that just 56% of Goldman's U.S.-based first year analysts are white, compared to 70% at Deutsche Bank, 69% at Barclays and 66% at Bank of America and Credit Suisse. Overall, Vettery also found that 77.5% of this year's first year analysts are male and that most of them come from a few top schools.
JPMorgan thinks banks' trading desks might have had a good third quarter now that volatility's up. (Financial News)
ICAP is making brokers renegotiate their contracts so that it can cut their pay by 20%. (Bloomberg)
Barclays has stopped paying legal fees for its US ex-Libor traders. They say this is wrong: they're whistleblowers. (Bloomberg)
Deutsche Bank is withholding the next installment of deferred bonuses for some senior executives following a series of fines. (Financial Times)
Citigroup might follow Goldman and stop bankers trading individual stocks. (Bloomberg)
Jamie Dimon's pep talk: 'Don't worry if you lose your job, better things are around the corner.' (Bloomberg)
Mark Gallagher, a senior financial sponsors banker at UBS in London, is leaving soon. (Financial News)
Bill Gross was in liquidity trap denial. (New York Times)
Germany might ban late night work emails. (Huffington Post)
How to successfully study for the CFA exam when you have children. (300 Hours)