The official position is that all reports are “totally speculative” until business plans are revealed to investors along with third-quarter results. But he’s only eight weeks away from October 27th. Decision-making time is running out as the board must agree on what to do. The time for the showdown is basically this week’s scheduled board meeting in Singapore, according to “people familiar with the matter.”
And apparently it’s going to be a real argument. The fact that it is the default solution (which was the default solution), there is a strong faction on the board. I am in favor of massive layoffs and elimination of entire departments like the securitized products team. But there’s also a powerful faction led by former JP Morgan star Blythe Masters, who seems poised to argue that it’s a little more complicated than that.
Banks are complicated things. There are many parts and many connections between them. It’s all too easy to ditch business lines that appear unprofitable and capital-consuming. Then you realize you’ve destroyed the service center of your most profitable business, but you still need capital. A vision of “advisory-driven, light capital, wealth-focused” sounds great on a slide deck, but it’s not just about securitization teams being trusted moneymakers and ultra-high-net-worth clients seeing Bill Given the inclusion of Fan and Rex… Greensill, you begin to wonder if the argument must have been flawed if these were the conclusions.
Thankfully, the Special Board Committee reviewing this plan includes many people who know what they are doing. It’s interesting to look at their background and guess where they line up. Mirko Bianchi, for example, was his CFO at Unicredit during the Jean-Pierre Moustier era. This era was all about cutting costs and getting rid of underperforming franchises. In contrast, Richard Meddings rose to fame with his Chartered Standard between 2002 and 2014. He’s seen both booms and busts, and he’s more aware than most that cost-cutting moves tend to go on forever, and that investors don’t seem as happy as they might hope. must be
Blythe Masters is also on the committee, and as the inventor of the highly defamed and greatly misunderstood Colla The ad hoc committee is chaired by Michael Klein, who left the City to join McKinsey in 2008.
Chicago gangster Al Capone apocryphally said that a kind word and a gun can get you farther in the world than a kind word alone. The dilemma is how confident they are that their core Swiss franchise can stand out from the rest. If they get it wrong, they may realize that if you have a global investment banking network and a nice suit, you can get a lot more wealth management clients than just a suit.
Elsewhere, the inflationary pressures affecting gasoline, potatoes and semiconductors appear to be starting to affect an equally important commodity, the Bloomberg Terminal. Depending on the number of devices, your monthly bill could increase by 9% or more. The price he refreshes every two years, so the annual rate isn’t that high, but it’s still going to be a notable uptick by the time banks consider their general overheads.
If you are a trader, it is very likely that there is nothing anyone can do. Client chat and order management systems are so deeply integrated into the Bloomberg infrastructure that it’s almost impossible to get rid of them. However, in other roles, especially in management positions, the terminal is somewhere between a luxury item and a status symbol, said one of his investment banking heads. If you listen carefully, you may hear a disturbance in the Force, as if a thousand green dots suddenly turned red and then went silent forever.
in the meantime …
Morgan Stanley is now also dropping coronavirus testing and notification emails. If you test positive, you’ll be told to quarantine for five days and wear a mask for another five days, but basically just go back to your office.(Bloomberg)
Dystopian cartoonist Emily Laochua isn’t the only ESG expert looking to head to Bank of America. His ESG team at the company has hired Alexandra Basirov from BNPP, Suley Saleem from Calvery Research and Management, and brought Andrew Stinson in-house from his global corporate banking group. (Reuters)
“I want a bank with employees who eat their nails for breakfast…I don’t want an investment bank with employees who need emotional support dogs.” They serve a similar role as emotional support dogs. (CNBC)
UBS cut six people in Hong Kong, with DCM, investment banking and real estate bankers all laid off from their mainland China-focused team. The individual appears to have been at the director and executive director level. (Bloomberg)
A detailed consumer guide to getting and using a burner phone. While it says you shouldn’t rely on unregistered status to protect you from serious criminal investigations, it also provides some good reasons why someone needs a burner phone. excuse for own A burner phone if you happen to get caught in one. (wired)
Analysts fundamentally misunderstand the relationship between how good you are at Excel and your status as a top MD. (Confessions of Wall Street)
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