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I made it to the upper ranks in the banking sector. Until last year (when I left to start my own gym in Singapore) I was the head of Citi’s Asia Pacific corporate bank, in charge of about 300 bankers across the region. But despite having had a long and enjoyable career, banking wouldn’t be my number one choice of job if I were graduating in Singapore or Hong Kong today.

I’m not the only person thinking along these lines either. I believe the prestige that banking has traditionally enjoyed in Asia is on the way down as more fresh grads and MBAs are looking to work for technology companies, fintech start-ups or private equity firms. If it doesn’t go well for them in these other industries, well, they can always go into banking later (especially if they’re from a top university), but banking may no longer be the default sector to start out in.

What would put me off banking if I were a grad in 2018? For starters, global banks are no longer doing large-scale hiring in Singapore or Hong Kong and the investment dollars going into recruitment and retention have ebbed. Compensation – even in investment banking – has also fallen, which is another reason why I would seriously consider other options like tech or PE.

More importantly, there’s the real perception among bankers that risk and compliance teams (not bankers) are effectively running banks today. The extent of regulatory reform since the financial crisis has been the most significant change I’ve seen over my entire 35-year career. This is largely a welcome development for the financial sector as a whole (and for consumers), but it has made it costlier to run a bank and more difficult for banks to make the same net incomes as they did in the past.

While I don’t blame the regulators for being hawkish, there’s no doubt that financial regulations have made front-office jobs less interesting and less fun. All the bankers I talk to these days bemoan how difficult it is to do their jobs. From simple account opening to lending standards and foreign exchange – everything has become (and is still getting) more challenging. Many bankers now spend much of their time making sure they don’t inadvertently mistep on regulations. And for banks operating globally, this means multi-jurisdictional regulations – head-office as well as local rules. For better or for worse, that’s the way the industry has evolved.

On top of this, of course, the rise of fintech is also disrupting the way banks operate. This is good for customers – both people and companies – but again, it makes it harder for large banks to make money and stay relevant. Take China for example: if I am a Chinese consumer, I can run a lot of my life via Alibaba websites. I can buy all kinds of stuff on Taobao; pay my bills and move cash through Alipay Wallet; borrow money (if I’m an SME) from MyBank; and park my spare cash in MyBank investments. This is all under one roof – there’s no need to use a traditional bank.

With artificial intelligence set to drive more banking processes in the future, the number of bankers that banks need to employ may also decrease. I can see AI driving analytics in predicting consumer behaviour, credit metrics and currency movements, so banking job descriptions must evolve to accommodate these irreversible trends.

In summary, the job market in banking is becoming more brutal, because the pie has shrunk (largely thanks to regulatory reform and technology) and job satisfaction and security are not what they used to be. If you’re a young banker today and want to stay in the sector, you need to carefully consider where your future employment prospects may lie. Where will your skills still be wanted?

Here in Asia, for example, the big Chinese banks are still growing (although they may currently not have the full spectrum of sophisticated products that global banks have). There are still truckloads of opportunities for Mandarin speaking bankers who understand how to operate in China.

Hong Kong bankers are best placed to take advantage of this growth, thanks to their city’s strong nexus to the mainland. But I think Singapore could potentially be a large talent base for Chinese banks in the near future. The big question, though, is whether bankers in Singapore will be adventurous enough to want to spend a lot of time in China (these roles will require either relocating there or doing frequent business trips). This is exactly the kind of question you need to start asking yourself as a banker (or as a grad who still wants to join the sector). Working in banking isn’t going to get any easier.

Agnes Liew work for Citi for 35 years, latterly as head of APAC corporate banking.

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Fixed-income traders in the markets unit of Credit Suisse’s Asia Pacific division are likely now casting an envious eye at their banker colleagues in ECM, following the release of the Swiss firm’s Q3 financial results. The markets team (equities and fixed income trading) in APAC, endured a torrid third quarter, registering a loss before taxes of CHF4m, compared with profits of CHF49m and CHF45m in Q2 2018 and Q3 2017, respectively. Credit Suisse’s Q3 earnings report pinned the loss on lower sales and trading revenues from fixed income.

There was bad news on the pay front for APAC markets staff, too. Compensation and benefits decreased 24% year on year in Q3, “primarily driven by lower discretionary compensation expenses, lower employee benefits, lower deferred compensation expenses from prior-year awards and lower salary expenses following our restructuring efforts,” the report said. This contrasted to an increase in global markets bonuses globally.

The third quarter in Asia shaped up better over in ‘wealth management and connected’, the larger of Credit Suisse’s two APAC units, which combines private banking with a team called ‘advisory, underwriting and financing’ (i.e. IBD). WM&C as a whole posted a profit of CHF180m, up 4% year on year.

Although private banking (CHF133m) dominated WM&C profits, advisory, underwriting and financing enjoyed a larger uptick in year-on year revenues (15%) in the third quarter. ECM bankers out performed their DCM counterparts – there were “higher equity underwriting revenues, partially offset by lower debt underwriting revenues” in Q3. And they also helped the firm gain regional market share. Credit Suisse ranks third for Asia Pacific (ex-Japan) ECM revenue by bank in the first nine months of 2018 – up 13 places from 2017, according to Dealogic.

In private banking, Credit Suisse’s most important APAC business, hiring of relationship managers has slowed down. The bank’s regional RM workforce stood at 600 in Q3 – up by 10 people year on year, but down by 10 compared with Q2. By contrast, Credit Suisse’s main rival in Asian private banking, UBS, added 72 RMs over the same period, taking its headcount to 1,100.

Meanwhile, Credit Suisse’s private banking gross margin was 76 basis points in 3Q, four basis points lower than in Q2, “mainly reflecting lower transaction-based revenues and lower recurring commissions and fees”. Credit Suisse’s RMs are at least becoming more productive. They now manage CHF346m each on average, a 7% increase from a year ago.

CEO Tidjane Thiam remains bullish on Asia. In an interview following the release of the financial results, he described the bank’s Asian business as “fantastic” and enthused about the region producing a “constant flow of new billionaires”. The Asian business is heading in the right direction, despite quarterly fluctuations, he said.

Credit Suisse has been hiring in APAC. Its overall headcount in the region increased by 250 in the year to end-September to reach 7,300, although this includes hires in Asian markets outside of Hong Kong and Singapore.

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This is not how David Solomon wanted to celebrate his one-month anniversary as chief executive of Goldman Sachs. Two former Goldman Sachs bankers have been charged with conspiring with a Malaysian financier to launder billions of dollars embezzled from a sovereign-wealth fund. What’s worse, prosecutors believe several other employees at the firm knew of the alleged bribery scheme but kept the bank’s compliance department in the dark, according to Bloomberg.

Former Goldman partner Tim Leissner, once one of the firm’s highest-paid employees, pleaded guilty to conspiring to launder money in a multiyear criminal enterprise that the Wall Street Journal has called “one of the biggest financial frauds in history.” Roger Ng, the other former Goldman banker who allegedly participated in the bribery scheme, was arrested on Thursday around the same time Leissner pled guilty.

Meanwhile, one of the firm’s most senior bankers in Asia, Andrea Vella, was placed on leave pending review of the allegations. Vella hasn’t been charged but people familiar with the matter confirmed to the Journal his identity as an unnamed co-conspirator. Vella co-headed Goldman’s Asian investment banking business until two weeks ago, when Solomon stripped him of his management duties. Vella remained at the bank, however, suggesting the move had nothing to do with the ongoing probe and that Goldman only learned of Vella’s alleged involvement this week. Leissner and Ng had been mentioned in previous reports regarding the ongoing probe, but Vella’s name first hit print on Thursday.

The difficulty that Goldman Sachs faces is that the fallout may have only just begun. Prosecutors said that “employees and agents” of the bank were aware of the deal reportedly masterminded by controversial financier Low Taek Joho, who had no formal position with the fund, and also knew of the alleged bribes and kickbacks to Malaysian and Abu Dhabi government officials to help win the $6 billion bond offering. However, prosecutors allege these unnamed employees worked to hide the details from the bank’s legal and compliance departments, according to Bloomberg, which cryptically asked: “Will others be next?”

Speaking at an event in New York on Thursday, former Goldman Sachs CEO was asked what the investigation means for the bank’s reputation. “Well, it’s not good,” he said.

Elsewhere, Credit Suisse laid a bit of an egg on Thursday. While on pace to report its first annual profit since 2014, the bank failed to inspire investors with its third quarter results as cost reductions cut into net revenues. The firm’s markets division performed particularly poorly, posting a surprising loss that forced the bank to abandon its $6 billion revenue target for the business.

Meanwhile:

UBS is preparing to relocate 64 roles from its London office to continental Europe in preparation for the UK’s exit from the European Union, with more likely to follow. (Financial News)

Following gloomy report after gloomy report, it seems U.K. and EU officials are making progress toward a deal that would give London banks basic access to EU markets post-Brexit. (Reuters)

Thousands of Google employees walked out of offices around the globe on Thursday to protest its workplace culture and how the company responds to sexual misconduct claims. A total of 47 offices participated in the walkout. (The Guardian)

A New York hedge fund led by former J.P. Morgan CFO Douglas Braunstein has taken a large stake in Deutsche Bank, making it one of the lender’s largest shareholders. Braunstein said that Deutsche Bank’s management team was “as dysfunctional as you could basically find” back in 2017, but appears to be on board with the current regime. He believes the firm’s underperforming global-transaction-banking unit is the key to the bank’s turnaround. (WSJ)

A day trader who is on trial for insider trading was in contact with several other wealthy traders and financial journalists, though the only other person charged is former UBS compliance officer Fabiana Abdel-Malek, according to his lawyer. Walid Choucair and Abdel-Malek face up to seven years in jail. (Bloomberg)

Citigroup plans to move 63 employees from its trading unit and private bank outside of the U.K. as part of its post-Brexit plans. Quite an exact number for a proposal. (Bloomberg)

UBS has set up a confidential hotline for employees to report sexual misconduct and harassment following claims that the bank mishandled allegations from a graduate trainee who said she was raped by a senior employee. (Financial News)

Rothschild executive Nigel Higgins will succeed Barclays Chairman John McFarlane when he steps down in May of next year. (WSJ)

Another software engineer disclosed their entire salary history. (Humanwhocodes)

Banking interns say very sycophantic things about their summer bosses. (Business Insider)

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I am a former banker who runs a technology company. We have several million in funding and offices in London and San Francisco. I am living the start-up dream. I am also sick of my ex-banking colleagues who’ve rebranded themselves as venture capitalists (VCs).

It is not an exaggeration to say that Europe is full of them. The majority of VCs here come from finance backgrounds and have very little practical and operational experience.

Qualitatively this shows in a lot of VC partner meetings we take, especially ones that progress to deeper due diligence. VCs are often criticised for having a herd mentality but I am astounded sometimes by the way some VCs we have met aren’t willing to look at business models that aren’t pure vanilla SaaS annual recurring revenue (ARR).

These former bankers don’t really understand the businesses they’re investing in, and it shows. In the U.S., where in my experience VCs are more competent, 90% of their investments underperform the S&P 500 over a 10 year horizon. Only the top quartile generate returns that warrant the VC industry’s existence. Fundamentally this means that if you truly believe you have a great early stage tech business then actually 9/10 VCs are bad for you. And when you have a start-up, giving opinion, control and optionality to the wrong parties can be an existential mistake. It doesn’t help that ex-bankers also tend to make unreasonable demands when it comes to as preference shares, double dip preferences and board seats. They don’t understand the business and I don’t want them involved.

This is why I’ve avoided all the ex-bankers in the funding market and instead taken money from high net worth investors who have either built and sold multi-billion pound businesses from near scratch, managed private equity funds, or come from a sector-specific background that’s appropriate to our current stage of development. At first I thought ‘PE, how can that help’ but in reality these guys make hundreds of investments and get really involved in turning those businesses around. That experience with business models and how they work in varying markets is something incredibly important for a young tech business looking to find product market fit.

In this way I hope our company will succeed. We need energy, ambition and intelligence to create coupled with the experience to avoid mistakes and to identify and capitalize on opportunity. The second half of that equation is what I want my investors (and senior staff) to provide. If they’re ex-bankers, I really doubt their capacity to do so.

Matthias Fournier is the pseudonym of a former banker turned technology entrepreneur.

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At most banks, recruitment is now moving towards the end of year pre-bonus hibernation period. There are a few “hanging” candidates waiting to finalize contracts who may or may not move before 2019, but most firms are focused on drawing-up next year’s plans for headcount rather than busily interviewing to fill gaps, however urgent. Not so Barclays. The British bank is said to be scouring the street for one particular type of trader.

“Barclays are interviewing everyone in London for positions in their rates trading business,” says one New York rates trader, speaking off the record. “They’ve called in the whole street since September as they try to fill their gaps.”

Barclays’ most pressing gaps are understood to be on its U.S. dollar rates swaps desk in London. The bank has been building its U.S. swaps desk since hiring Chris Leonard from Arcem Capital in June 2017. In May this year, it hired Bertrand Botschi from UBS for the desk in New York, but in London the team was depleted by the departure of Rikhil Agarwal for hedge fund Capstone Investment Advisors in June. The London U.S. dollar swaps desk is understood to be down a single trader as a result.

It’s not clear how many U.S. swaps traders Barclays wants to hire, but the numbers are unlikely to be huge – at best, the desk is unlikely to expand beyond three people, but bank’s enthusiasm for end of year hiring is notable.

Barclays declined to comment for this article. The British bank has recruited nearly 50 MDs to its markets businesses since 2017 and made over 275 external hires so far this year. The bank’s macro income rose 10% in the quarter, with European rates in particular turning in a strong performance – even as other banks complained of weak revenues in the area.

Photo: Getty

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Are you a corporate banking relationship manager in Hong Kong? Do you want to know how your salary and bonus stack up, to help you decide whether you might be better off at another firm?

We’ve averaged out Hong Kong corporate banking salary surveys from four recruitment agencies to produce the table below, which shows low and high base pay ranges (and bonus percentages) from analyst to managing director (MD) level.

The salary levels for RMs in our table owe much to the most recent hiring boom in corporate banking – 2010 to 2013 – when a competitive job market helped to push up pay, says John Mullally, director of financial services at recruiters Robert Walters in Hong Kong.

More recently, global banks in Hong Kong have been shedding underperforming RMs and there’s been enough talent on the market to meet banks’ needs. If you change banks, expect a pay rise of about 10% to 12%, says Jack Leung, a business director at recruiters Hays. That’s a far cry from the increments of 20% or more experienced earlier in the decade.

Top-performing RMs, however, can earn more than the market average and still snare decent pay rises. But demand is now focused on RMs with mainland corporate clients rather than local or multi-national ones. “People with large books of Chinese clients are best positioned when it comes to pay negotiations,” says Mullally.

Global corporate banks in Hong Kong – the likes of Citi, HSBC and Standard Chartered – still tend to pay higher salaries than their Asian rivals. But Asian firms are currently recruiting more aggressively and can offer better potential bonuses. “Bonuses for Chinese, Singaporean and Japanese banks in Hong Kong continue to be competitive. They have higher bonus ranges than US and European banks,” says Leung from Hays.

Corporate banking salaries in Hong Kong still pale in comparison with those in investment banking, as our IBD pay table shows.

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Remember Uberto Palomba? He’s the ex-Goldman Sachs managing director and former head of EMEA emerging market trading who spent three years at hedge fund Citadel before leaving in March 2018. He’s planning a comeback. Sources say Palomba is joining Millennium Management in London in February next year.

Both Millennium and Palomba declined to comment on the move.

Millennium has lost various people this year following the formation of ExodusPoint, a new fund led by its former star trader Michael Gelband. At our last count, ExodusPoint had already recruited around 11 former Millennium traders and portfolio managers for its offices in New York and London.

Palomba’s exit from Citadel came after Bloomberg claimed he made losses on a Hungarian trade and turned in a “negative performance for 2017.” However, Palomba’s long period out of the market is thought to reflect his high returns at Citadel long term. – The fund typically requests that former employees delay working elsewhere if they want to collect deferred bonuses based on historic performance. Palomba’s decision to abide by this suggests his deferrals were considerable.

Palomba is not the only member of Citadel’s former emerging markets team to resurface elsewhere. Benjamin Griguer, an ex-BNP CEEMEA rates trader who spent four years working with Palomba at Citadel, joined ExodusPoint in September.

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The list of the most in-demand programming languages in banking isn’t all that much of a surprise. Most every developer can rattle off the first three or four and may even get the order right. However, knowing which ones will be utilized the most in the future is a much more difficult task.

To get a better idea, we looked at all the tech-related jobs that every big bank posted in the U.S. and the U.K. in October of this year and cross referenced them against a list of the most popular programming languages in banking, courtesy of analytics provider Burning Glass. We then compared the percentage of tech openings that listed those languages as a prerequisite to the same data from October of 2017. Some programming languages are just as hot as they were last year; the popularity of others have shifted somewhat dramatically considering the relatively short time frame and the large sample size.

As you can see, Java remains the go-to programming language in banking, with more than 40% of all tech-related job postings including it as a required skill – the same number as last year. Banks appearing particularly desperate for Java developers include Deutsche Bank and J.P. Morgan; roughly 45% of their tech postings contain the word Java.

However, Python has made a huge leap over the last year. More than 23% of new tech jobs are asking for Python experience, up from 19% a year ago. Roughly one-third of tech openings at Barclays list Python as a required skill. Credit Suisse actually has more openings mentioning Python than Java. Other firms that require Python more often than competitors include Citi, Bank of America and UBS, with the latter two relying less on Java than the rest of the industry.

While the use of Python at big banks has increased progressively over the last decade, this year’s jump may be partially due to the fact that non-developers have recently begun utilizing it. Python’s unique modeling capabilities and relative ease of use have caught the eye of analysts, traders and researchers, who now use it in their own work. In fact, Citigroup just started offering Python coding classes to banking analysts and traders as part of its continuing education program. Perhaps banks are catching on and are now hoping more non-tech candidates come in with Python experience.

While Python job openings have increased, so have the number of candidates. In research conducted earlier this summer using our own database, we found there were 26 candidates with Python experience for every related job, up from 14 in December of 2016. Competition is on the rise.

Meanwhile, one of the “colder” programming languages in C#, which has seen a drop in demand due to new requirements in the current trading landscape. “C# is still in use but now pretty much only for quanty, low-latency things,” said Christian Glover Wilson, vice president of technology and strategy at Tigerspike. However, top C# developers often demand greater salaries than some of their colleagues due to the type of work, he said.

***Banks that were included in the research: Bank of America, Barclays, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, J.P. Morgan, Morgan Stanley, Nomura and UBS.

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When’s the best time to get pregnant if you work in an investment bank? According to my female colleague on the trading floor, it’s August. That way you can announce your pregnancy to your boss in October and make sure that you’re not filtered out in end of year redundancies. – Banks are so fearful of court cases nowadays that they will rarely make a pregnant woman redundant.

At least, that’s my colleague’s thinking. She had her first child less than a year ago and – even though she readily admits that it’s not optimal – has decided to have a second child in the middle of next year. We all know that cost cutting is coming and rightly or wrongly she thinks that her pregnancy will protect her.

Her strategy may not work. The shape of the team is shifting. All our new hires have coding skills and my female colleague – who manages the team – does not. She already works 12 hour shifts, commutes 45 minutes each way and looks after her young family and she says she has neither the time nor the inclination to learn how to code. This is a problem. She can’t replicate the work the juniors are doing herself and her role is increasingly becoming that of an administrator. Clients have started bypassing her and going to the juniors directly. This hasn’t gone unnoticed internally: she’s rarely able to elaborate upon or explain her work at meetings. However, she wanted to get promoted so that she earned a higher salary, but when you work in a bank a promotion simply means you’ll appear more on the management radar.

I don’t know how to code either and I too therefore feel exposed. And because my female colleague is pregnant again I’m even more fearful that I will be chosen when my managers are looking for people to cut.

Do I blame her? Not really: if I had a choice I would probably do the same. My colleague is the biggest earner in her family – her husband is a school teacher and is very passionate about his job and they couldn’t lead their lifestyle without his income. She was planning a second child anyway, so you could say she has simply brought her pregnancy forward a few years.

Nonetheless, I’m not sure it’s the right decision. I suspect that my already exhausted colleague is simply storing up more stress for the future. This is a short term fix to problem that is only going to get worse. It would help if the bank had given her more support when she returned from her first maternity leave – but despite all the talk about helping working mothers, that kind of support barely exists. Instead, therefore, she’s taken matters into her own hands. I hope it works out.

Hector Saville is the pseudonym of a trader at a U.S. investment bank

UOB is starting to shed its reputation as the most conservative of Singapore’s local banks as its third-quarter financial report shows big upticks in average compensation and headcount.

Staff costs per head at UOB – total employee expenditure (such as salaries and bonuses) divided by total headcount – rose by a substantial 10.4% ($6,728) year on year to reach $71,633 for the first nine months of 2018. While earnings at UOB are unlikely to exceed those at larger rival DBS, which reports on Monday, they are already higher than those at OCBC, which paid its employees $65,514 on average in the year to end-September.

If compensation continues to rise at the current nine-month rate, UOB will end up spending more than $95k on its average staff member for 2018.

What explains UOB’s inflation-busting generosity? The bank has added 928 people to its payroll over the past year (taking its headcount to 25,826) – but more importantly, many of these new recruits are working in well-paid roles. UOB has been hiring in technology, a job sector which is experiencing above-average pay increases because the Singaporean tech talent pool isn’t growing quickly enough to meet demand from global banks, local banks and tech firms.

An 11% year-on-year rise in total (i.e. staff and non-staff related) costs was partly driven by, “IT-related expenses as the group continued to invest in talent, technology and infrastructure to enhance productivity, product capabilities and customer experience”, according to UOB’s Q3 report. UOB announced plans in October to increase its 120-strong digital bank team by 50% over the next 12 months. And as we reported last week, almost a fifth of all vacancies at UOB are currently in tech and digital roles.

Pay is also rising in tech because the jobs on offer at banks in Singapore typically now demand more specialist skills than they did just two or three years ago. Business-as-usual vacancies focused on legacy systems or hardware infrastructure are declining in popularity as UOB and its rivals seek people in high-earning emerging fields such as machine learning and data science.

Away from tech, UOB has also been increasing its spending on its expensive front-office employees: those working in group wholesale banking (which serves corporate and institutional clients) and in global markets (which provides foreign exchange, interest rate, commodities, equities, and other treasury products). Expenditure increases of 14.8% and 6.8%, respectively, in these two divisions were partly attributed to staff-related costs.

UOB appears to be paying better bonuses than it did last year. The bank also pinned the overall increase in its expenses on “higher performance-related staff costs”.

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Senior executives at Goldman Sachs likely let out a collective groan over the weekend when they learned their odds of being crowned with the industry’s most sought-after title have been narrowed. Set to be announced this week, Goldman’s latest class of partners will be the smallest since before the company went public in 1999.

The onus to keep the upcoming partner class light comes directly from new CEO David Solomon, who told managers to be particularly selectively this year as he aims to make the top rung more exclusive, according to the Wall Street Journal. Fewer than 65 people will get the call this time around, down from 84 two years ago. The number of Goldman partners has ballooned from 221 when the firm went public to 435 today. Sources also told the Journal that the diminutive class will help offset the unusually high number of lateral partner hires that were made this year. More than a dozen outsiders were hired as partners in 2018.

The 20 or so employees who may have made the cut in previous years will be missing out on a minimum salary of $1 million along with bonuses that often dwarf base salaries. So who will be the unlucky losers? Likely it will be high-ranking employees who work in legal, compliance and control departments, according to the report. A host of executives who work in these non-revenue generating roles were named partner following the financial crisis, though that trend appears to be slowing.

As a former investment banker himself, Solomon has elevated several of his brethren to high-level positions since being named the successor to former CEO Lloyd Blankfein. If that trend continues, a host of investment bankers are set up for a fortuitous week. Solomon has also been vocal about bridging the gender divide at the top levels of management. It wouldn’t be at all surprising to see the percentage of women who are named partner increase this year.

Elsewhere, a Deutsche Bank exec who travels globally around 10 times a month has found the secret to offsetting jetlag and keeping his energy up. Unfortunately, it involves waking up at 5 a.m. and sweating. New York-based managing director Piers Constable has participated in numerous triathlons and marathons across his 20 years of travel. At the least, he goes for an early morning run every day. “For me it’s a magic combination — it invigorates my body after a long flight; it energizes me for the day ahead, clearing my mind and removing stress and keeps my mindset positive, so I appreciate the opportunities travel gives me and I don’t begrudge the time away from family and friends,” Constable told Business Insider.

Meanwhile:

Well that didn’t last long. After most banks sat out an investment conference in Saudi Arabia following the murder of journalist and government critic Jamal Khashoggi, big names in the industry like Blackrock’s Larry Fink said they are planning to continue their dealings with the Middle Eastern country. Consulting firms including McKinsey, Booz Allen Hamilton and Boston Consulting Group are doing the same. (Bloomberg)

The average Merrill Lynch broker will receive what amounts to a 3% pay cut in 2019 under a new compensation plan. However, Merrill is also adding incentives for cross-selling products from parent-firm Bank of America. (WSJ)

There is an implied contract between tech companies and recruits when it comes to culture. When that culture appears to change, tech workers have shown they aren’t willing to sit on their hands and do nothing, like what happened with the Google walkouts last week. “If the company breaks the trust and doesn’t match the values, then it becomes personal.” (FT)

The huge bribery scandal that unfolded last week that resulted in the arrests of two former Goldman Sachs bankers is far from over. An unnamed “high-ranking executive” from the bank reportedly attended a 2013 meeting with the co-conspirators. That mystery exec is likely gnawing at their fingernails at the moment as authorities and the bank continue to investigate the matter. (Bloomberg)

Luigi Rizzo, Bank of America’s head of investment banking in EMEA, will move from London to Paris as part of the firm’s post-Brexit plans. The banks will announce additional senior management appointments in the EU shortly. (Financial News)

A number of London-based staff at Société Générale will lose their jobs if they are unwilling to move to Paris as part of the bank’s no-deal Brexit contingency plan. (Financial News)

Fintech and other startup companies that rent out office space at WeWork in Manhattan received some sobering news last week. The company will no longer offer bottomless kegs of beer to its tenants. The new limit will be four pints of beer per person per day. (WSJ)

Looking for an edge, some hedge funds are paying companies for access to “alternative data,” like the location of cell phone signals. One company collected smartphone location data from Tesla’s factory to show the car maker had significantly increased its overnight shift, giving hedge fund’s reason to believe Tesla would hit its production goals, which it did. (WSJ)

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Selim Adyel, a former associate on Morgan Stanley’s algorithmic trading desk, has joined Caxton Associates after a sabbatical during which he studied artificial intelligence and crytpocurrencies.

A graduate of the elite École Centrale Paris and the equally elite École polytechnique fédérale de Lausanne (where Einstein studied), Adyel was the first student to be selected for a dual degree from both institutions. He ranks in the top 2% globally on coding website Hackerrank, for both Python and Java problems, and he has completed Stanford University’s online machine learning programme with a 98% pass score.

In apparent recognition of Adyel’s ability, Morgan Stanley promoted him to associate just one year after he joined as a graduate recruit. At Caxton, he will be a quantitative analyst supporting the fund’s global macro investments.

Caxton has a reputation for paying exceptionally well. In 2016, for example, average pay for all employees at the fund was $892k, while average partner pay was nearly $5m and the highest paid employee earned £58m ($75m). In 2017, however, Caxton’s profits plummeted 92% and the employee with the best compensation took home ‘just’ £4.3m.

Adyel isn’t Caxton’s only 2018 hire. The fund also hired David Caplan from Blackrock as an assistant portfolio manager and Abhishek Reddy from Barclays as a macro trader, both in June and Mehmet Adil Tezgul, as a portfolio manager from Millennium in April.

Adyel’s exit follows that of Jas Sandhu, Morgan Stanley’s top equities algo strat, who left for RBC Capital Markets last month.

““

A senior Goldman Sachs technologist has just left the firm for Red Hat, the open source enterprise software provider that was recently acquired by tech giant IBM for $34 billion.

Tim Hooley, a technology managing director at Goldman Sachs, left Goldman this month and has joined Red Hat as chief technology officer for the Europe, the Middle East, and Africa (EMEA) region.

Hooley had been at GS for over 22 years. Red Hat is his first big move. At Goldman he led research and sales services technology focusing on digital transformation, marketing, analysis and operations. In 2016, Hooley drove GS’ first Degree Apprentice Program for Computer Science in partnership with Queen Mary University in London.

The acquisition of North Carolina-headquartered Red Hat, is IBM’s biggest deal ever and the third-biggest deal in the history of the U.S, technology sector. Red Hat is known for its support of the Linux operating system. The company describes itself as offering a Linux platform with, “military-grade security, support across physical, virtual, and cloud environments, and much more.” IBM boss Ginni Rometty, said the acquisition was,”a game-changer,” and that it, “changes everything about the cloud market. IBM will become the world’s #1 hybrid cloud provider, offering companies the only open cloud solution that will unlock the full value of the cloud for their businesses.”

Hooley is not the only Goldman Sachs employee to leave and sell cloud computing services back to financial services clients. Last month, Yinka Fasawe, a Goldman technology analyst, joined Google’s London office as a ‘customer engineer’ for Google Cloud, working with financial services clients.

““

In theory, M&A bankers should be comparatively safe from Brexit. When Boston Consulting Group concocted a chart of London jobs that were and were not immune to its effects in 2016, M&A jobs were in the super safe zone. The implication was that most M&A jobs would stay in London. Why, then, has Bank of America Merrill Lynch just shifted Luigi Rizzo, its EMEA head of investment banking, to Paris?

The simple answer is that Rizzo will deal with BAML’s European Union-based clients after Brexit. Henceforth, he will be known as ‘head of EU Corporate and Investment Banking’ and will be part of BAML’s Europe leadership team under Bruce Thompson, who’s leading the bank’s post-Brexit European business out of Dublin. Just as Goldman Sachs has been moving some senior Europe-facing investment bankers to Milan, Madrid, Frankfurt and Paris in preparation for Brexit, so BAML is simply doing the same.

Even so, eyebrows are being raised. 2018 has been a bad year for Bank of America’s investment banking business. M&A revenues at the bank fell 33% year-on-year in the first nine months. Along with Christian Meissner’s ejection as head of the corporate and investment bank in September, the decline has fostered a sense of instability – not least among the cohort of former Goldman Sachs bankers who flooded to Bank of America Merrill Lynch after the financial crisis and whose authority is now being challenged.

Rizzo is part of the cohort, having joined BAML from Goldman Sachs in 2013. The deposed Meissner was ex-Goldman too. So is Diego De Giorgi, BAML’s London-based co-head of investment banking, whom Bloomberg recently claimed (seemingly incorrectly) has been rarely seen at BAML for 18 months. Rightly or wrongly, the FT attributed Meissner’s exit to he and De Giorgi’s “tribal management style,” in which ex-Goldman bankers were favoured over Bank of America Merrill Lynch loyalists.

Although De Giorgi remains in London, the disappearance of Meissner into the sunset and of Rizzo to Paris is therefore perceived in some quarters as a weakening of the influence of the ex-Goldman bankers at BAML London in a year when their performance has left much to be desired. Meanwhile, Paris is emerging as a potentially new sphere of influence for ex-Goldmanites. It’s not just Rizzo, the Paris markets business will be run by Sanaz Zaimi, whom BofA hired from Goldman in 2009.

Bank of America declined to comment for this article. Rizzo is unlikely to the only BofA banker moving to France. BofA’s fancy new Paris office, which is due to open in early 2019, is expected to accommodate around 400 people in total, of whom 200 are likely to be in the front office (across investment banking and sales and trading). Recent big-name French-speaking hires at BofA in London like Severin Brizay and Laurent Dhome may get the nudge too. The bank already hired Jerome Renard from Credit Suisse as head of EU equity capital markets, based out of Paris, starting from November.

The good news for any BAML bankers moving to Paris is that the existing French team already has momentum. While the rest of Bank of America’s M&A business has floundered this year, France has thrived: BofA went from 21st to 10th in the French league tables in the first nine months of 2018.

The bad news is that the real power base for BAML’s European investment banking division (IBD) will stay in London. – Rizzo will report to De Giorgi and to Jim O’Neill, the BAML lifer who heads EMEA corporate and investment banking. De Giorgi and O’Neill will both remain in the City. BofA’s prospective Paris moves are already said to be causing political infighting in the global markets division. They have the potential to do the same in IBD, particularly as long-serving Bank of America and Merrill Lynch staff try reasserting their authority against the ex-Goldman incomers. 2019 could be an interesting year.

““

Saying Tesla and SpaceX CEO Elon Musk has had a tumultuous last year would be a massive understatement. There was his infamous tweet suggesting he had financial backing lined up to take Telsa private, resulting in a $20 million fine from the Securities and Exchange Commission and being banned from holding the dual role of chairman. Musk was then sued by a British diver who helped rescue a group of youth soccer players trapped in a Thai cave after calling him a “pedo” on Twitter. He also went viral by appearing to smoke pot during a podcast interview. Add in scrutiny over worker safety and potentially false production claims and you’ve only hit the highlights. But despite it all, the next generation of tech talent is dying to call Musk their boss.

More than 13,000 students just rated Tesla as the fourth most prestigious internship, behind only Google, Apple and Microsoft, according to a new survey from Vault. What’s more, the car maker’s ranking jumped two spots from a year ago, when it finished 6th. After all the headlines, Tesla is more popular now among the next generation than it was 12 months ago. In fact, Musk seems to be one of the reasons for Tesla’s surging reputation, according to yet-to-be-published comments Vault sent to eFinancialCareers.

“Anything with Elon Musk on it sounds great,” one student told Vault. “Elon Musk is changing the world,” added another. “I love what Musk is doing,” said a third. One respondent appeared to question Telsa’s direction, saying “change is necessary,” but also added that the car maker is still “the future.”

Perhaps more eye-opening is the fact that SpaceX, Musk’s private space transportation service with the ultimate goal of colonizing Mars, ranked as the 9th most prestigious internship, according to the survey. SpaceX didn’t even make the top 50 a year ago. Again, there was praise for Musk, with one student saying they’d pay money to intern at SpaceX. “Elon Musk! Love the idea of private space travel,” said one. “Almost every engineer wants to work here,” noted another. “The culture at SpaceX is amazing; there is nothing else like it,” said one student who just wrapped up an internship at the company.

Most of the complaints from Musk’s interns were what you’d expect: long hours and the stress that accompanies tight deadlines. While Musk’s erratic behavior has invited plenty of media scrutiny, the vast majority of young prospective employees don’t seem to care. Despite the negative headlines, Musk is still very much a selling point rather than a detriment.

Meanwhile, interns surveyed by Vault aren’t as high as they used to be on Facebook, which has also seen its fair share of controversy over the last year, highlighted by its privacy scandal and claims of being used for election tampering. Facebook fell from third to fifth in this year’s intern survey. The drop seems directly related to recent news, with every negative comment sent our way attacking Facebook’s public perception rather than its work environment.

“I don’t trust them after all the scandals they’ve had this year with transparency,” said one student. “Steals private information from everyone and their grandmother,” according to another. Even mixed reviews mentioned the social network’s teetering reputation. “Good on resume but slowly ruining [its] name.” Facebook has also recently faced claims of a politically divisive work culture.

Lesson learned. You can get in Twitter wars, smoke all the pot you want and take on the SEC and the media. Just don’t mess with people’s privacy.

Follow @BeecherTuttle

““

Sometime this week, Goldman Sachs will announce who is being promoted to partner at the firm this year. The Wall Street Journal says fewer than 65 people will be promoted, down from 84 two years ago. The expectation is that managing directors in compliance, control and legal divisions will lose out as CEO David Solomon focuses on promoting revenue generators. However, insiders say it’s not just non-revenue generators who won’t make partner this year – it’s global equities professionals too.

“This year’s partner class will be the smallest since 1998, but in global equities it will be the smallest since the early 1990s,” says one senior Goldman insider, speaking off the record. “Several people have dropped out of the running already.”

Revenues in Goldman’s global equities division were up 15% year-on-year in the first half of 2018, and 8% year-on-year in the third quarter. The firm has been investing heavily in its electronic capabilities after falling behind the likes of J.P. Morgan and Morgan Stanley. However, Goldman has also been hit by numerous exits to its electronic trading business after alleged difficulties bedding in the Bloomberg Tradebook deal.

If equities professionals will be particularly disappointed when Goldman announces its partner class this week, who at GS is likely to get lucky? Goldman insiders suggest a retinue of names across the fixed income division. They include the likes of: Niharika Cabiallavetta, a credit salesperson who’s been at Goldman since 2005; Eric Murciano, Goldman’s co-head of emerging markets and FX sales, who’s been with the bank since 2004; Muhammad Qubba who joined as head of North American rates sales from Morgan Stanley in 2015; and maybe also Murciano’s co-head – Adam Crook, and Brian Friedman (a strat).

Away from fixed income, Solomon is expected to promote disproportionately heavily in the investment banking division. And some equities professionals are understood to be on the list. They include Arun Dhar, a London equities salesman who’s been with the firm since 2010, and Tom Leake, the EMEA head of equity structuring.

Goldman Sachs did not comment for this article. However, the MDs who will feature in the lucky 65 know who they are. – The firm has already been holding private conversations with those it stands to disappoint – and letting them down gently before the list is officially announced. The Financial Times reports that Talat Khan, a senior equities trader in London, resigned already after being informed that he would’t make partner. Khan was promoted to MD in 2013.

Photo: Getty

““

Banks in Hong Kong are not typically offering pay rises of more than 20% to lure new recruits. In contrast to two years ago, salary increases for candidates moving between banks are now largely in the 15% to 20% range, even in the most sought-after sectors.

We asked six recruitment agencies to tell us percentage pay increments (at VP level) for the most in-demand Hong Kong banking job functions. We then averaged out their figures to produce the chart below.

M&A tops our table and is the only job where average salary hikes for mid-level candidates squeak past the 20% mark. Headhunters say this is because there is an ongoing talent shortage of Mandarin-speaking bankers with experience working on cross-border deals involving mainland companies.

Beijing imposed capital controls last year, causing M&A volumes to fall by a third to US$140bn from 2016’s record levels, according to Reuters. This year, however, new Chinese regulations have been introduced which encourage genuine foreign investment but restrict ‘speculative’ deals in sectors such as overseas property. Despite global trade tensions, outbound acquisitions are expected to increase Chinese M&A lending in the second half of 2018, following a disappointing first half.

Large pay increases in M&A are also being fuelled by hiring at Chinese banks in Hong Kong, which are inching up M&A league tables and boosting their traditionally low base salaries as they compete with Western firms for talent. CICC and China Renaissance both cracked the top-10 banks for Asia (ex-Japan) M&A revenue in the first nine months of 2018, according to Dealogic.

Just behind M&A on our chart sit three predictable sectors. While compliance candidates could count on 25% to 30% just two years ago, 20% is now the norm. Compliance hiring in Hong Kong is falling as fixed-term contracts expire, technology takes over jobs, and banks’ reach their desired headcount levels.

Meanwhile, talent shortages continue to plague private banking and cyber security, so banks are offering 20% when they recruit.

Follow @simonmortlock

Image credit: DanielBendjy, Getty

It’s become a thing to intone against the perils and unnecessity of going into a finance job too soon. Lloyd Blankfein had plenty to say on the subject as CEO of Goldman Sachs and recently Dane Holmes, Goldman’s head of human capital management has been saying something similar. “Your career often follows an unpredictable path,” said Holmes last week. “…loosen up just a bit and enjoy the journey.” Basically, chill.

One finance professional who did just that is Yngve Slyngstad. Now aged 55 and earning $800k a year as head of one of the world’s largest funds (of which more below), Slyngstad had more than the average gap year. After leaving university and before going into finance, Slyngstad took four years off. The Financial Times says he spent them ‘on the road’, shifting from Patagonia to New York to Alaska, and from Alexandria to Cape Town. The road trip culminated in six months spent alone in an Arctic cabin, where Slyngstad read German philosophy and presumably grew a small beard.

Three decades later, Slyngstad is chief executive of Norges Bank Investment Management, which overseas Norway’s $1 trillion, and he’s pretty relaxed. He books all his own flights, arranges all his own meetings and isn’t overly concerned about the fact that he’s earning $800k while other portfolio managers with funds a fraction the size of the one he oversees are on multiples of his pay. – If anything, Slyngstad says he’s paid too much because his job – which involves investing for the Norwegian population and operating at the intersection of finance and politics is the, “most interesting.”

Having spent most of his career in Norway, Slyngstad presumably hasn’t ever applied to work for Goldman Sachs, but his attitude does seem to be what Lloyd Blankfein was referring to when he said, “To succeed, you have to be a complete person. In the early part of your life you should focus a lot on being a complete person.” Four years travelling and six months with philosophy books in an Arctic cabin in your early 20s may not be as remunerative as 80 hour weeks on an analyst programme, but it will at least give you perspective. With even Goldman Sachs urging students to stop seeing life as a race and to explore, cabin-time (or its equivalent) may ultimately benefit the pursuit of a finance career.

Separately, there’s been another reference to Goldman Sachs’ coming ‘front to back review’ of its businesses. Stephen Scherr, who started as CFO yesterday, said Goldman plans a thorough review of each business line by next spring. “We’re looking at . . . what is the revenue potential for these businesses and against that looking at what the expense base is . . . and then coming to an assessment very clinically on whether that business is meeting its cost of capital,” said Scherr, ominously.

Meanwhile:

Goldman Sachs says it’s already generated $2.5bn of the extra $5bn of revenues it’s targeting, and that it may be able to do even better. (CNBC)

Harvard MBAs on $160k starting pay. (Poets and Quants)

Why Goldman Sachs is great for young people who want to be entrepreneurs. “Because I was surrounded by people who also had the same vision of working for themselves and doing their own thing, we kind of willed it into existence.” (Business Insider)

John Dugan, 63, a former bank regulator and former lawyer to the Citigroup board who became a Citigroup director, is becoming Citigroup’s chairman. (NY Post)

Citi named 45 year-old Philip Drury head of its EMEA advisory business. (Reuters)

James Bardrick, the head of Citigroup’s UK arm says the bank (along with others is spending far too long on Brexit):”One of my biggest concerns is about the sheer amount of time and energy and the bandwidth of people involved [in planning for Brexit] at our firms, at the regulators and policymakers….We should be looking forward, and out thinking about how not just technology, but also globalisation and the changing demographics in the world and the rise of mass affluence on Asia, how is that changing the way that we provide and deliver financial services.” (Financial News)

Barclays began building its 2,500 person technology campus in Glasgow. (ScottishConstruction)

It’s a bad time to work in UK private equity. – Carlyle has pared back investment in the UK following the country’s decision to exit the EU because of uncertainty over the terms of Brexit. (Financial Times)

Never eat a slug. (SF Gate)

““

A junior J.P. Morgan trader is to appear in court charged with criminal damage after allegedly participating in the trashing of an ambulance after England’s World Cup quarter final win last summer.

26-year-old Perry Jian, who lives in London’s Poplar district, is appearing alongside 21 year-old Larissa Bell, a waitress, and two other men at a London court later this month. While Bell has been widely vilified for her participation in the act, Jian’s involvement has largely gone unnoticed.

Videos of the event (seen here and here ) show a young Asian man dancing topless on the ambulance. A video on the Sun website shows the crowd chanting “We want Jackie Chan,” and the same man jumping on the top of the vehicle and dancing while the crowd jeers. The paramedics driving the ambulance were attending attending a patient nearby and were subsequently unable to attend nearby 999 calls because of damage to their vehicle.

J.P. Morgan declined to comment on the case. Jian, who studied economics at Singapore Management University, is an analyst on J.P. Morgan’s emerging markets, FX and rates trading desk. J.P. Morgan insiders suggest the bank was already aware of Jian’s involvement.

The FCA’s fitness and propriety rules require that financial services employees do not have criminal records and operate with integrity and honesty. If Jian is convicted, the incident could therefore have the potential to damage his banking career. However, some insiders at J.P. Morgan suggested the alleged actions are particularly inappropriate in a financial services context – the industry as a whole is trying hard to improve its culture and appeal to more women. Yobbish behaviour among young male employees on the trading floor should therefore be called out and acted upon.

““

In theory, French bank SocGen can’t afford to hire many new traders. – An analysis of cost revenue ratios in the first half of the year at the French bank by research firm Tricumen suggested costs are disproportionately high compared to revenues in both equities and fixed income trading. In reality, SocGen still seems stocking up on new senior traders all the same.

The French bank has just recruited Hussein Dbouk, a former head of sovereign CDS trading and ex-managing director at HSBC. Dbouk is joining as a managing director in SocGen’s credit trading business.

Dbouk is not SocGen’s only recent fixed income hire. In September the bank also recruited Manolo Pedrini, a former Goldman Sachs managing director and the ex-head of European rates and futures and options sales at Nomura.

Both Dbouk and Pedrini will be based in London, even though the bank has reportedly told 300 staff they will need to move to Paris because of Brexit.

The moves come after SocGen lost its global head of credit trading, Laurent Henrio, in June 2018. Henrio joined Axiom Alternative Investments as a portfolio manager in September.

SocGen is due to report its third quarter results on November 8th. In the first half of 2018, fixed income trading revenues at the French bank fell around 18%. Nonetheless, SocGen aspires to become a leading player globally in flow products trading.

““

“I got to the top in Asian banking. But I wouldn’t enter the sector today”

Where to work (and where not to) at Credit Suisse in Asia

Morning Coffee: New Goldman Sachs CEO’s first real headache. Credit Suisse cuts haven’t healed

Comment: Beware the former investment bankers masquerading as VCs

As hiring slows, Barclays said to be “interviewing the Street” here

What your corporate banking salary and bonus should be in Hong Kong

Goldman Sachs’ ex-head of EM trading to join Millennium in early 2019

The hottest and coldest programming languages in banking right now

COMMENT: My female trader colleague said she got pregnant to avoid losing her job

UOB gives staff 10% pay rise as tech hiring triggers headcount surge

Morning Coffee: Bad news for the most ambitious people at Goldman Sachs. Deutsche Banker’s morning trick

Ex-Morgan Stanley algo trader reappears at hedge fund Caxton Associates

Goldman Sachs technology MD escapes to a senior role at $34bn software firm

Is Bank of America edging-out its ex-Goldman bankers to Paris?

20 year-olds are eager to work for Elon Musk, less so Mark Zuckerberg

Equities MDs said to be hit particularly hard in Goldman Sachs partner promotions

The only banking job in Hong Kong offering pay rises over 20%

Morning Coffee: Why six months in an Arctic cabin will benefit your finance career. Goldman Sachs to get clinical

Meanwhile:

JPMorgan trader in court for allegedly trashing an ambulance as insiders call for cultural clean-up

SocGen has been quietly hiring senior fixed income traders

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