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Morning Coffee: European banks driven to unexpected hiring frenzy. When you must choose between Goldman Sachs or Morgan Stanley

Given the state of investment bank revenues, it's not surprising that 2023 is a nadir for banking jobs and that roles are being eliminated rather than added. And yet, hiring is still happening in even the most enfeebled sectors and there is good reason for this: Fear of Missing Out (FOMO).

As banks like Goldman Sachs and Morgan Stanley cut thousands of staff, and as Credit Suisse's finest people seek an exit ahead of being let go by UBS, banks that would never usually have access to such fine specimens of employee are being galvanized into action. 

Key among them is Santander, the Spanish bank that has now hired around 10 senior bankers from Credit Suisse on what were reputedly multi-year guaranteed bonuses. "Santander could only have dreamed of this a year ago, one M&A banker, told IFR. "They are not seen as a true investment banking player in the US."

In the same way that the financial crisis provided an opportunity for Barclays to pick up top people from Lehman and to gain a foothold in the US market, the argument goes that the current shakeout is enabling lower tier banks to undergo a generational upgrade in their staff.

"Europe is lifting hiring freezes and in some cases finding that exceptional talent, once untouchable, is now recruitable," Jeanne Branthover, New York-based Managing Partner and Head of Financial Services Practice at DHR Global, informed Reuters, adding that European banks are eyeing up the talent that's appearing on the market and seeing if it compares. This is particularly happening at the top of the hierarchy: being a mediocre MD in a warm seat at a local player isn't quite such a comfy spot this year. 

Separately, if - like Ken Jacobs, the outgoing CEO of Lazard, you find yourself compelled to choose between job offers from Goldman Sachs and Morgan Stanley, you could follow Jacobs' strategy in looking at the entertainment options. 

"When I was being recruited by Goldman, I was taken to a basketball game on the Saturday. At Morgan Stanley I was offered to play squash. It was a very different feeling,” said Jacobs, who chose basketball at Goldman. 

As he prepares to step down, Jacobs told the Times he thinks that generative AI could be a game changer for the banking industry, in much the same way that Excel spreadsheets and the internet were. Spreadsheets sparked a boom in buyouts because they made it easier to analyze companies' financials; the internet facilitated index funds by democratizing access to the information underpinning them; AI could help unearth new anecdotes of similar situations to inspire deals, Jacobs said.

Meanwhile...

Jes Staley's lawyers are fighting back against attempts to blame him for the harm caused JPMorgan's provision of banking services to Jeffrey Epstein, arguing the allegations are  “completely absent” of concrete claims. (Financial Times)

What it's like to be a woman at Goldman Sachs: "To me there was never explicit bias...It was harder to interact with some of the senior men in the same casual way that other male colleagues at my level could.” (Financial Times) 

“Quantitative investment strategies” (QIS), which turn quant trades into swaps or structured notes are booming. (Bloomberg)  

SocGen's new executive Slawomir Krupa is likely to change the bank's culture. He's much more American in style. The way I work, what I expect of people day to day, the way my expectations are set out and followed on — certainly there are going to be style differences and in the end, things are going to be run differently.” (Financial Times) 

Citi hired Yashar Asl from BMO as head of electronic trading for EMEA. (The Trade News) 

Allen & Overy and Shearman plan to merge and create $3.4bn law firm to be named Allen Overy Shearman Sterling. It will have 4,000 lawyers spread across 49 offices. (FT) 

Morgan Stanley shares now trade at 11.8 times forward earnings, according to FactSet, a premium of more than 40% to the S&P 500 banks subindex. A decade ago they traded at just a 5% premium. Goldman now trades at 9.4 times forward earnings, and JPMorgan Chase at 9.8 times. (WSJ)

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AUTHORSarah Butcher Global Editor

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