Morning Coffee: Citi's job cuts seem slightly biased towards people in this office. The commercial real estate cloud

Citi's job cuts do not seem to have fallen equally.

When Citi conducted its first round of job cuts in New York a few months ago, publicly available filings reveal that it got rid of 716 people out of around 13,600 in NYC, or around 5% of the total. However, when Citi made similar cuts in Singapore, the Straits Times says it was proportionately more vigorous in letting people there go: around 500 Singaporean employees disappeared, even though Citi only employs 8,500 people in the city state.

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The deeper cuts in Singapore follow complaints from Citi people there, with several telling us that their roles were unexpectedly eliminated and that the new structure makes no sense. Citi, however, seems happy with its purge, which Bloomberg says was simply part of the bank's global effort to take out managerial layers and streamline operations. “Management layers are fewer, decision-making is faster, and the governance across the firm becomes much simpler,” Citi's Singapore country officer Tibor Pandi informed the Straits Times.

Some of the changes in Singapore reportedly involved shunting staff into the new international division. Others entailed the removal of frontline people like Serge Pomonti, Citi's head of institutional sales for Asia. Matt Long, Citi's head of FX institutional sales and solutions for APAC, left (possibly of his own accord) in May and is thought to be going to agency brokerage firm COEX Partners. 

Having cleared the decks, Pandi told the Straits Times that Citi is hiring again: the bank wants wealth managers and commercial bankers, he said. 

Speaking in New York, Titi Cole, the woman who was managing Citi's transformation project and who's now leaving the bank herself, said the global restructuring had been hard because, “It’s not easy to say to thousands of people that there is no job.” Part of the issue was that Citi had problems it had been ignoring for decades, Cole added. Maybe this applied more to offices on the other side of the world than those in the US. 

Separately, the Financial Times observes that although the coming round of US bank results is expected to be positive for M&A and capital markets revenues in investment banking divisions, all is not necessarily well. 

Investment banking division revenues are expected to rise 30% year-on-year in the second quarter, says the FT, noting that Jefferies' revenues actually rose by 60%, prompting chirps of optimism from Jefferies' management.

While investment banking fees are rising, though, so are write-offs. The FT says that JPMorgan, BofA, Citi and Wells Fargo combined are expected to report more than $7bn of unrecoverable loan losses in Q2, up 50% on the previous year. “Virtually every bank investor on the planet is just acutely focused on commercial real estate in particular,” observes one banking analyst. 

Meanwhile...

MBA graduates are now all about "search funds," where they look for a small business to grow and run in the style of private equity. The typical deal involves an acquisition of about $15mn purchased at just seven times ebitda and several small private capital firms now specialise in backing such search fund sponsors. (Financial Times) 

HSBC's new CEO may be announced later this month. An internal candidate is likely. "There are not many candidates to lead the company who will have the two essential skills of managing both politics and people."  (Reuters) 

Citi wants to secure credit ratings on senior loans it makes to direct lenders so that it can syndicate them. “Private credit markets are growing at 8%–10% a year, but bank balance sheets clearly aren’t growing at that rate. Banks are now looking to create more of a syndicated market out of their senior loan book, but you need to get ratings in order to maximise the distribution of these loans.” (IFR) 

Gen Z bankers are hard to manage. “They don’t take any sh*t. They are willing to get stuck in and stay late to work on deals, so I don’t want to say they’re lazy. But they push back on what they see as rubbish work or when their time is not being used efficiently. It’s a big adjustment for most managers.” (Financial News) 

Jim Leaviss, the chief investment officer of M&G Investments, is leaving to do an MA in the history of art. (Twitter) 

It's unwise to disclose a privileged background. Concealing it creates more focus on your talents and makes you more agreeable to others. (Financial Times) 

It's taken a while but Japanese bond traders are back in fashion. "The atmosphere was buzzing just like 20 years ago." (Bloomberg)  

Bill Hwang's Archegos defence: “They have a pump without a dump...Mr Hwang did not cash out a nickel.” Hwang “made a long-term commitment” and the large stakes he built were “a reflection of his conviction”. “He invested because he believed in those stocks.”  (Financial Times) 

Macron hardly ever sleeps and feels imprisoned in the Elysée Palace, the official residence of the French president in the center of Paris. So he walks around the city at night on his own. (Politico) 

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