Morning Coffee: Why banks can't decide whether to hire or fire you. Jes Staley's prankster shares psychological insights
Banking careers are not for the fainthearted. Jobs are typically insecure and finding a new one can involve a tortuous process that ultimately comes to nothing. However, try seeing things from a bank's perspective. When you're an investment bank, making new hires - especially expensive ones at the senior end, is fraught with peril.
"It’s an art, not a science," one senior banker tells the Financial Times of his firm's approach to headcount. "You don’t want to be too big, there’s a lot of cost to that, but you don’t want to be too small, you want to be able to leverage when things take off again . . . "
If you're a bank, deciding whether to hire or fire is also harder than it used to be. In the past, hiring in banks often came in waves with banks adding staff (or jettisoning them) in unison. Nowadays, the senior banker tells the FT things are different: because banks have different strategies with different clients and business mixes, hiring is more idiosyncratic. Each individual bank has to decide whether to recruit in its particular niche, and this can be more scary than stampeding after talent with the rest of the herd.
Even so, the FT detects some herding in Asia Pac, where it claims banks are now adding staff again: Goldman Sachs has just opened a Shanghai office and wants quantitative salespeople, Morgan Stanley wants to hire in Australia, Deutsche wants to hire TMT bankers. Even Barclays, whose new strategy is supposed to be focused on the UK and the U.S. is sniffing at Asian expansionism (again): the FT says both CEO Jes Staley and investment bank chief executive Tim Throsby have been to Hong Kong twice in the past year.
Separately, the 38 year-old web designer who tricked the Barclays' CEO into thinking he was Barclays' chairman John McFarlane, has been sharing his tips with the Financial Times. First, he says you shouldn't be afraid of using a Gmail address (he used email@example.com): most email software doesn't automatically show the full email anyway. Secondly: write, "Sent from an iPhone," after your hoax message to excuse the absence of a corporate email sign-off. Thirdly, “Keep it short to begin with and ideally reference something that will ring true. People accept a bit of bizarre once they feel they’re in the saddle of the communication.” These techniques won't work at Barclays again though: the British bank has tightened its security procedures and staff receive warnings when they're emailing outsiders since Staley's mistake.
High frequency trading firm Virtu has completed its purchase of KCG Holdings and is making 10% of staff redundant and closing offices in Singapore and Mumbai. (Bloomberg)
Average bonuses for London-based investment bankers fell to £100,000 this year from £115,000 in 2014, while payments for front line asset managers jumped to £103,000 from £56,000 over the same period. (Financial News)
European supervisors want Deutsche Bank to prepare a fallback plan to lay out how it could shift the clearing of trades from London. (Reuters)
Barclays is hiring 100 new private bankers across London, Dublin, Geneva, Monaco, India, Dubai, Jersey, Guernsey and the Isle of Man. (Reuters)
Morgan Stanley's stock rose 33% last year. In the circumstances, paying James Gorman an extra 7% is fine. (Reuters)
Mizuho is building its corporate bond business. It wants to hire 10 more people outside Japan this year (market conditions permitting). (Bloomberg)
Two women in pursuit of £3k allowed themselves to be ridden as horses around Poundland for 2.5 hours before discovering they had been hoaxed. (Devon on Line)