Morning Coffee: HSBC says goodbye to its biggest cost cutter. Goldman Sachs and Morgan Stanley bankers have a tricky choice of chatbot

Success is, according to a general consensus of bankers, considerably better than failure.  But there is one slight caveat to be made, which is that there is sometimes a terrible kind of finality to it. If a project fails, then (as long as management and shareholders will allow it), you can keep on struggling. If it succeeds, then there will be a time when the project is over, no more, and then you have to decide what you are going to do next.

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Something like this thought might have been on the mind of Pam Kaur, who has decided that after two years as CFO of HSBC, it is “the right time in my career to embrace new leadership opportunities and apply my experience in a different context”.  She was appointed to the job by Georges Elhedery, as one of his first actions on being promoted to CEO, and has been present for the major restructuring that Elhedery put in place, including significant redundancies.

And you don’t win a battle like that without taking some psychic casualties.  In fairness to Elhedery, he has very much taken ownership of the decision, and Kaur was apparently not even in the top three most feared managers at HSBC. But nevertheless, when costs are being cut, it is the finance department which has the responsibility of agreeing the budgets, and usually the CFO who needs to be present at all the fractious budget meetings.  It must have been a stressful couple of years, and one which might have been likely to leave anyone thinking that a change of scene and a new challenge would be welcome.  Possibly including a new set of colleagues who don’t remember the conflicts of the past, although Kaur is apparently going to remain in an advisory post on “ongoing strategic projects” for a while.

It’s interesting to note that Pam Kaur may have learned the skills of personal resilience that served her so well at HSBC in a previous job which, perhaps surprisingly, seems to have been quite the crucible of champions.  She joined the HSBC group in 2013 to be head of internal audit, coming from Deutsche Bank.  The other famous alumnus of the Deutsche internal audit division is, of course, Christian Sewing, who managed to implement a similarly successful turnaround. Perhaps the lesson is that if someone has seen and survived the all of the things that were present at Deutsche in the early 2010s, there is nothing left in banking that could possibly scare them.

Elsewhere, OpenAI has launched “ChatGPT for finance”, a tuned version of its flagship Astra model which has built-in access to data from a number of vendors and is meant to either replace junior bankers, or to help them more efficiently generate models and presentations.   According to Nick Turley, VP of Product, “We’re effectively teaching ChatGPT to research like an analyst and back up its conclusions like an analyst”.

Turley is not an investment banker, so it’s possible that he wasn’t being sarcastic when he said “like an analyst”. But this does potentially raise a bit of a problem for some bankers, because OpenAI’s product launch is meant to directly compete with a similar set of plugins for Anthropic’s Claude chatbot.

Famously, tech bankers like to ostentatiously use their clients’ products.  This includes AI agents – the bankers on the SpaceX IPO had to spend a while trying to work with Grok. But Goldman Sachs and Morgan Stanley are sharing the lead role on the forthcoming IPOs of both OpenAI and Anthropic.  So whose chatbot should they use?

For the bankers actually working on the deals, it’s an easy decision – use the one that is relevant to your team.  But what about everyone else?  There are already some difficult internal politics to negotiate, with everyone at both banks keen to demonstrate that both tech companies are being treated fairly and that information separation is maintained.  If one chatbot catches on, then the bankers for the other team might reasonably feel like they’re being snubbed.  So wise junior bankers might feel like it’s best to have two robot friends rather than one for a while.

Meanwhile …

The Chinese government has decided to tell bankers how to do their jobs.  With the local IPO calendar as crowded as a rush-hour underground train, representatives from the securities regulator have apparently been speaking to bankers, warning them that they only want to see flotations of quality companies and national champions, and that they would prefer a “conservative” approach to pricing, so that the Shanghai market gets a reputation for stocks that go up rather than down. (FT)

Hannes Hofmann is going from JPMorgan to HSBC to be their global head of family offices.  He will be joined by his colleague, Cayman Wills, who quite possibly has the most appropriate name possible for an ultra-high net worth banker. (Bloomberg)

Christopher Woolcott has pleaded guilty to four counts of fraud after inventing a number of fake identities and filing forged documents in order to make it look like there was a takeover bid for a Canadian oil exploration company.  (FT)

There are still Partners at Goldman Sachs, but there are only seven “Partner partners”, who were members of the partnership before it became a limited company in 1999.  Now there will be six, as Sharmin Mossavar-Rahmani, CIO of the global wealth management business, is retiring. (Bloomberg)

“Selling the family silver” used to be the ultimate expression of disgrace, but lots of people these days would actually much rather have a decent cash inheritance than a load of old fashioned cutlery that can’t go in the dishwasher. (WSJ)

A global luxury brand has to get very angry before it does this; the Dorchester Hotel has got tired of a member of the Qatari royal family not paying a bill, and has applied to a court for an order to let it sell the car he parked there.  It was only a £25,000 Abarth compared to a bill of nearly half a million, but it’s the principle of the thing presumably. (FT)

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