Equities traders brace for more cuts after difficult bonus round
The recent past has not been kind to people in banks' equities sales and trading businesses. First Citi cut equities staff last summer and into the autumn, then UBS did, and then Barclays did the same. For those who survived the cuts, bonuses do not appear to have been great - and the threat of ongoing redundancies remains.
Sources say that equities bonus pools at U.S. banks were typically down around 20% on last year. Among Europeans, only Credit Suisse and UBS have reported so far, and some suggest bonuses there were down by even more still. Banks don't comment on bonuses, but there are suggestions that UBS's equities bonus pool was down 25%. Credit Suisse's equities bonus pool is said to have been "awful," although sources suggest top performers there were paid well, and even saw bonuses rise.
There may be more pain to come. Barclays reports its annual results tomorrow and although CEO Jes Staley has said he's committed to the equities business, he's clearly not averse to cutting costs. French banks BNP Paribas and SocGen have already reported their results but have yet to announce bonuses. Both still have costs to cut and equities teams may find themselves on the front line of front office pruning.
The real concerns, however, are with regards to HSBC which is due to report both its annual results and to unveil a new strategy next week. There have been unconfirmed suggestions that this strategy may involve pulling back from equities in London, New York and Germany. HSBC hasn't commented on the rumours, but sources suggest that the bank's successful electronic execution platform, run by ex-KCG and Goldman trader Rob Crane should be fine and that cuts are more likely in research and sales. Crane was recently promoted as HSBC's interim head of EMEA equities, which should help the cause of HSBC's execution employees.
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