Morning Coffee: Tales of senior banker insensitivity while junior bankers melt. UBS does an HSBC
Working insane hours as a junior in an investment bank happens for various reasons, including pointless pitching and a constellation of simultaneous live deals, but it's also a function of intergenerational vengeance. - Managing directors in banks worked similar hours during their own "apprenticeships" and now that they're older and fighting a paunch, there's satisfaction to be had in expediting the aging process of today's young analysts.
It's either that, or they genuinely don't care. In a long article, New York Magazine suggests it could go either way.
The Magazine has unearthed various anonymous members of the Goldman Sachs 13 who assembled this year's 'working conditions survey'/slide deck on their nightmare weeks. They say the survey was never intended for external viewing, but that Goldman's senior bankers were initially unsympathetic - without the ensuring media storm, nothing may have come of it.
The working conditions presentation, which leaked from Goldman in March 2021, was based on a survey of the firm's TMT analysts undertaken ten months previously, in May 2020. The junior bankers had been trying to leverage it internally ever since. - They presented their findings to an "indifferent" senior banker on a Zoom call. They tried a GS partner who told them that having no time to shop for food (after Goldman stopped subsidizing meal deliveries during work from home) was no big deal and that,"When I was an analyst, I used to eat ramen noodles. Just microwave some ramen — you should be fine.” They tried a senior executive who allegedly passed it to CEO David Solomon. Still nothing.
It's not just at GS. At Citi, where CEO Jane Fraser has at least been doing her best to implement Zoom free Fridays and where analysts were given four days off for Memorial Day weekend in May, analysts told New York Magazine that Fraser's edicts were being overruled by MDs. “We get an email five minutes later saying ‘This doesn’t apply to our group,’” said one Citi associate. Another analyst said he received an email he informed a VP he was on the way to hospital with COVID: “No time off. He was like, ‘Oh, thanks for letting me know. I actually have a staffing for you."
In a comment on our Facebook page recently, someone said it helps to think of a career in banking as akin to being stuck on a pirate ship for an around the world voyage. One distressed debt trader, who NY Magazine says used to work for Goldman (but actually appears to have worked for Barclays) encapsulates this truth. Sitting a desk with a mug emblazoned with, “F*cker in Charge of You F*cking F*cks,” he says the hours are a given and that juniors' job is to accept them without complaint: “It’s kind of like an unwritten code that you just don’t talk about it. You kind of just man up and do it....”
Separately, after HSBC scrapped some ranks at the top of its hierarchy in July, UBS seems to have had a go at the same thing. Reuters reported yesterday that the bank will be discontinuing all ranks above managing director from January 2022, and Bloomberg said that everyone previously known as 'divisional vice chairperson and regional group chairperson' at UBS will now just be part of an amorphous managing director group instead.
Maybe this doesn't matter, but as at HSBC it could have repercussions for the people who are no longer quite as special as they used to be. - Members of HSBC's eliminated top ranks were concerned that they would lose privileges like first class flights and unusually fat pay rises. UBS's chairpersons-turned-managing directors might experience the same.
More aspersions cast on the future of Credit Suisse's equity business, this time by Citi's banking analysts. “We also fear the exit from prime is likely to leave the rest of the equity business as nothing more than a service function for the wider group and unable to turn a profit in its own right.” (Financial Times)
The equities trading business is crucial to Credit Suisse's wealth management division and therefore integral to its future. The structured credit and leveraged finance divisions are not - they could have been spun out and would likely have fetched a good price right now. (Bloomberg)
Credit Suisse's equity capital markets division appears to be suffering. Last year, it was the leader of US IPO underwriting, with a 12% market share driven by SPACs. This year, it's down to 9th with a 4.1% market share. (Bloomberg)
After making huge profits in 2020, large multi-strategy hedge funds aren't having so much fun in 2021. Balyasny Asset Management, BlueCrest Capital Management and ExodusPoint Capital Management are understood to have curtailed several traders' risk taking after they hit maximum loss levels. (Yahoo)
Google has invested $1 billion in futures-exchange CME Group. Google Cloud will eventually power CME's trading systems. The deal will enable CME to introduce more AI and new risk monitoring systems. (WSJ)
Only 1.5% of fintech firms are founded by women. (Finextra)
The return on equity in SocGen's Global Banking and Investor Solutions division is 12%, which is comfortably above the bank's 10% target. (Reuters)
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