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I’m a senior investment banker at Deutsche Bank in London and yes, I’ve read the news. I understand that the bank’s bonus pool is supposed be down 10% on last year. I appreciate too that the cost target is a constraint and that some people may see their bonuses cut by 15% to 20%, possibly more. However, there are various reasons why I also think that people like me will be rewarded when bonuses are announced in a few months’ time.

Firstly, a stream of senior people have left our franchise over the past year. There are plenty of them, from Conor Hennerbry to Kristian Triggle, Tadhg Flood, Claire Brooskby, and Rainer Polster. Many left in the second half of 2018 and generated revenues up until their exits. – We’re hopeful those revenues will be diverted to paying those of us still here.

Secondly, I think that senior management understand the gravity of the situation. People who have remained loyal to Deutsche during the recent difficult years have not done so because we lack alternatives. We have done so because we want to give this bank a chance. We like our jobs here. We like Deutsche Bank and want to stay. However, we have all seen colleagues leaving for better jobs elsewhere. Some of us have even made a move to leave but been wooed back by Deutsche’s promises of high pay. If bonuses are dreadful here again this year, a lot of people will lose patience and decide to take the risk of trying something different.

Lastly, I understand that CEO Christian Sewing appreciates the dynamic that has afflicted the allocation of bonuses at Deutsche Bank for far too long. – For years, a cadre of senior managers who were not themselves dealmakers, kept a large proportion of the bonus pool for themselves. In this way, the bank squandered its bonuses on no-name bureaucrats without the kind of profiles that would enable them to get hired elsewhere. Because of this, the dealmakers who brought in the revenues were underpaid, and many decided to move on. I think that Sewing now understands there is no value in overpaying internal power players while underpaying the people who know the clients. – Or at least, I sincerely hope he does, for Deutsche Bank’s sake.

George Grisham is a pseudonym

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OCBC Bank prides itself on being an innovator and it is not surprising that this innovative spirit is also evident in the bank’s development of talent.

Yap Aye Wee, OCBC Bank’s Head of Learning & Development, says its people development strategy is powered by its employee value proposition: ‘We see you”.

“We see our talent as individuals with unique combinations of strengths, passions, weaknesses and blind spots, as well as immense potential. Every initiative and programme we introduce is intended to unlock that potential in different ways. They also embody the employer brand values we stand for – that we are caring, progressive and strive to deliver a difference.

“As an employer, it is our responsibility to make sure that everything we provide – our learning content, priorities, processes, policies, infrastructure, and systems – allow employees to continually learn, unlearn and relearn,” she says.

Yap’s team challenges learning conventions to deliver experiences that engage learners while remaining highly relevant. One such example is the range of fully-immersive experiential programmes it offers to its non-executives which range from a full day’s sailing course, to rock climbing, to a pottery workshop, to learning to play a musical instrument.

This series was developed following feedback from non-executive employees that classroom-based programmes were too theoretical and dry. She adds: “We found a way to embed critical soft skills such as teamwork, strategy and learning agility in an experience that was totally engaging and fun.”

The signature series is hugely popular and she believes that OCBC Bank is the only company in Singapore to offer such programmes. The bank’s commitment to its staff stems from a strong appreciation of the important role individuals play in its business.

Yap explains: “Technology can only do so much. Ultimately, banking is a people business. Where the rubber hits the road, banking is about a representative from the bank connecting at a very emotional level with a client.

“Without people, we don’t have a bank because banking is founded on trust, credibility and relationships. For that reason, it is very important to stay invested in our people.”

This belief is reflected in the way OCBC has approached technological disruption. While many organisations focus on ensuring their staff is up-to-date with the latest products and systems, OCBC is investing time and money in helping its staff future-proof through its Future Smart programme.

The S$20 million three-year programme is focused on reskilling OCBC’s 29,000 global workforce to ensure no one is left behind by digital disruption.

It is designed around the three Es of “education”, “experience” and “exposure”, and takes a structured approach with four qualification levels and a seven-pillar curriculum, covering areas such as digital business models, technology and data, customer centricity.

It also emphasises the need to evolve the culture and its leadership. It is supported by a suite of 6,000 online programmes, as well as speaker sessions, workshops and classroom learning. Overall, there are more than 10,000 different programmes covering 50 categories.

Ultimately, the programme makes it possible for a bank teller to be re-skilled and literate in a completely different area, say smart machines, over three years. It is believed to be the largest-scale and most ambitious digital transformation initiative by any bank in Singapore. “It is not your typical learning and development intervention but a three-year bank-wide programme,” says Yap..

Another unique aspect of the programme is that it uses a ‘gig’ approach, enabling employees who have acquired new skills to take up consulting gigs on a freelance basis with teams that are running digital projects.

The initiative, launched in May this year, has been highly successful, and more than 6,000 employees have since taken a Future Smart course while thousands more have attended symposiums and workshops.

Yap says: “These high numbers speak to the encouraging fact that people are very eager to learn, and that they find our content relevant to them.”

Unsurprisingly, women’s progress in the workplace is also significant to OCBC, not least because more than half of its workforce is female. However, its approach to ensuring women excel is not to impose KPIs and quotas such as management gender ratios.

Yap points out that while affirmative action has its merits, it is not without problems. Instead of setting quotas, OCBC finds ways to address the unique challenges that women face.

As an example, to provide aspiring women with the personal guidance and mentorship they will need, the bank launched MentorMe, a nine-month mentoring programme in which people in senior leadership positions mentor mid-career women at the bank to help them progress.

The initiative is supported by workshops for women, providing them with the skill sets they need when they come up against issues or challenges.

The bank also focuses on “upstream” issues that prevent women from realising their full potential in the workforce, for example, by providing onsite childcare facilities at three of its locations in Singapore, as well as offering flexible work arrangements.

It also demonstrates that it is caring through the creation of Employee Resource Groups that support parents, such as single mothers or those whose children have special needs. In addition, when an employee’s child is 12 and sits for Singapore’s Primary School Leaving Examination, they can take special leave to support their child.

OCBC does not only focus on training its staff or helping them juggle work and family responsibilities, but it also aims to involve them as educators through its Campus Stars programme.

“Ultimately, what we aim to create is a learning organisation and the best way to learn is to teach,” says Yap. Under the scheme, nearly 400 staff have voluntarily given up their time to become trainers in programmes that transfer their institutional knowledge to other members of the bank.

OCBC also has a video production room at its campus to create digital content to enable subject experts to share ideas and build thought leadership through its cloud learning system, which can be accessed by all employees worldwide.

Yap is justifiably proud of everything OCBC does to help its employees reach their full potential. “We are a learning organisation, and we take care of our people by continuing to develop them.”

I recently graduated with high marks from a consensus top-five MBA program in the U.S. One of the best aspects of attending a “target” business school is that prestigious companies from a number of industries come to interview you on your own campus. Unless your resume is a mess, you are basically guaranteed a chance to sit down with at least a few companies on your short list. First the banks and consulting firms came through, and then the big-name tech companies had their opportunity later in the semester. Eyeing a corporate strategy position outside of finance and consulting, I interviewed with Google, Amazon and Twitter. While they may be unique to me, these were my experiences.

What are you asked as a non-engineer at Google interviews?

As I sat down to look at what jobs Google had available, I was awestruck by the sheer number of open positions. As a non-engineer, I found it rather difficult to nail down one or two specific jobs that would be a fit. Product and project manager jobs all sounded similar; I felt like I needed to pick a vertical or business line and hope it was the right one for me.

On the day of the interview, I sat down with two Google PMs. The very beginning was somewhat boilerplate: why do you want to work here, what makes you a good fit for the culture etc. And then all of a sudden, they started hitting me with crazy questions, almost as if they tried to lull me into a sense of security and then surprise me. The first non-standard question I was asked was what my evacuation strategy would be if I was the mayor of San Francisco and a 9.0 magnitude earthquake hit the city. It felt like a total 180-degree turn from where the interview was going, but I was prepped not to freak out at strange hypothetical questions and to stay composed. The manner in which you respond to the question and explain your rationale was more important than the actual answer, I was told.

While I felt like I handled myself well after finishing my response, my sense of optimism waned considerably as the interview went on. The two interviewers would simply not let up. They just kept on asking follow-up questions about my earthquake answer. I had to defend arguments that, quite honestly, I made up on the fly and couldn’t have prepared for.

By the end, I left with the sinking feeling that they didn’t like my response. In short, it’s easier to tell someone the process matters more than the answer with brain teasers and hypotheticals when you aren’t the one who has to constantly defend it. I found Google’s interview to be exactly that: a defensive challenge. I didn’t prepare myself well enough to handle the barrage of follow-up questions.

What are you asked as a non-engineer at Amazon interviews?

Describing my interview for a strategy role with Amazon is somewhat difficult. I remember the vibe I felt walking away more than I do any specific questions. To me, the three people who I interviewed with gave off the impression that Amazon can be a bit cultish. Again, it’s just one isolated experience, but that’s what I felt. They referred to CEO Jeff Bezos as “Jefferey.” There was an air and an attitude about them that made me feel as if they were talking down to me.

As with Google, questions were asked and re-asked again and again. But they didn’t feel like follow-ups as much as statements: “we didn’t like your last answer.” Every question skewed toward the negative, like “how could you handle this role considering you have no work experience in finance?” By the end of the two hours, I was so annoyed that I felt like I was almost subtly fighting with them. I don’t know if they were just testing me, but by the end, I really didn’t care.

What are you asked as a non-engineer at Twitter interviews?

My final interview was with Twitter, which felt like a breadth of fresh air. It was more conversational. I only met with one person, and he was the hiring manager for a specific role. The questions weren’t too tricky; they were more about getting to know you. He explained what he did and then allowed me to hit on some of my preparation and creativity. I wasn’t pigeonholed with a specific hypothetical but was rather asked to pitch an idea that would help Twitter increase engagement. A natural conversation ensued.

Unsurprisingly, the only second interview request I received was from Twitter. But I turned it down to go work for a startup. I went to business school because I wanted to work in corporate strategy at an innovative company. Looking back, I think my biggest mistake was equating tech companies and Silicon Valley with entrepreneurism. They are plenty innovative, but to me they gave off more of a corporate vibe than I was prepared for.

Alex Dotson is a pseudonym

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How many hours will you really work in an investment bank now? After all those initiatives to cut working hours, is it true that banking jobs are about as arduous as a long shift at the Big Four?

Not exactly. Forum website Wall Street Oasis has updated its figures for average working hours by bank for 2018. The results reflect submissions from thousands of users.

The chart below reflects the new reality. If you’re looking for a nice 9-5 job, banking is still very far from being it. However, WSO’s findings imply that you’ll work far (far) longer hours at some firms than others.

The worst offenders for working hours are still the corporate finance boutiques. Moelis & Co. has long had a reputation for brutal working hours and this still seems deserved: the average Moelis employee claimed to work over 83 hours a week. Hours were also comparatively harsh at Evercore, Perella Weinberg, Jefferies, Rothschild and Lazard.

French banks are the most lenient. Average working hours at Credit Agricole, Natixis and SocGen were among the lowest. At British-government owned RBS, the working week is apparently a mere 61 hours.

The biggest surprise comes from the big U.S. investment banks. Based on WSO’s data, J.P. Morgan, Goldman Sachs and Bank of America all look like comparatively undemanding places to work, although working hours seem to have crept up in 2018. Credit Suisse, meanwhile, looks comparatively demanding.

WSO’s figures haven’t been validated by the banks concerned, so we can’t guarantee that they’re right. Banks typically don’t share this kind of working hours data though, so in a murky area WSO provides a shred of light. Yes, you will earn good money working in an investment bank – but you will also put in hours that are well above the norm.

Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com in the first instance. Whatsapp/Signal/Telegram also available. Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

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Have a confidential story, tip, or comment you’d like to share? Contact: sbutcher@efinancialcareers.com
Bear with us if you leave a comment at the bottom of this article: all our comments are moderated by human beings. Sometimes these humans might be asleep, or away from their desks, so it may take a while for your comment to appear. Eventually it will – unless it’s offensive or libelous (in which case it won’t.)

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A London-based managing director who complained of Deutsche Bank’s historic under-investment in information technology (IT) just left the German Bank.

Charles Elliott, the chief information officer (CIO) at Deutsche is understood to have departed DB after 11 years. It is not clear at the moment what his next move will be. At Deutsche, Elliott headed Client Data Services which included client onboarding.

During the decade he spent at the German Bank, Elliott managed technology for OTC (over-the-counter) collateral management, listed derivatives and clearing transformation, and trading surveillance. When he took over technology for listed derivatives and clearing transformation in 2010, Elliott says he found a “lack of a roadmap for technology” and “historic under-investment” in the segment.

Deutsche Bank has had an unwieldy array of operating systems. When ex-CEO John Cryan took over in June 2015, the bank was running more than 40 operating systems, and there were 100 different booking systems for trades in London alone. In his “Strategy 2020” plan in October 2015, Cryan expressed his intention to cut the bank’s operating systems from 45 to four. By mid-2018, Deutsche was running 32 different operating systems. One analyst estimates that DB has underspent on technology for an entire decade.

Before joining Deutsche Bank in 2008, Elliott was a senior manager at Accenture. He began his career as a consultant at Logica in 1995. His other stints include working as a senior developer at Schroders, a consultant at Capco, and an associate director at Fidelity International.

Deutsche has been trying to level-up its technical expertise. In 2018, it created two new software teams in London for new product development as well as started the Alpha-Data Innovation Group (DIG) to use machine and deep learning for deriving insights from both financial and non-financial data. The bank has also hired 900 people for its technology centre in Bucharest.

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Credit Suisse has hired a director in London to look after sales in Europe.

James MacDonald, an executive director at JPMorgan for the last eight years, joined Credit Suisse earlier this month. MacDonald began his career at Cazenove in 2007 and moved to JPMorgan when the two banks merged. He looked after pan-European equity sales.

MacDonald’s move to CS comes at a time when banks are preparing to move jobs out of London ahead of Brexit, which is still scheduled for March 2019. MacDonald will be handling European sales at Credit Suisse, which is precisely the kind of job most likely to move to Europe after Brexit because it will be no longer possible to sell to European clients from London.

Many banks are relocating their London teams to Frankfurt and Paris. Credit Suisse, on the other hand, has chosen Spanish capital Madrid for its new trading hub. The Swiss bank is contemplating locating an indeterminate number of global markets professionals and investment bankers in Spain after expressing an intention to move 50 jobs to Madrid in July 2008. Frankfurt is likely to play a secondary role.

Credit Suisse didn’t respond to a request to comment for this article. However, the bank said last year that it was “working to maintain access to EU clients and markets by leveraging existing infrastructure in the event of a hard Brexit,” and that its solution will involve Madrid, Frankfurt and Luxembourg. “London will remain a key part of the bank’s footprint,” it added.

Meanwhile, the Swiss bank has been hiring. In December 2018, Credit Suisse said it had hired over fifty people in equity derivatives and 10 “senior research analysts” who had “initiated research coverage on 13 sectors and 185 stocks” over an unspecified time period.

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When people complain about the financial crisis a popular refrain is that no bankers ended up in jail, except in Iceland. In the UK, this could soon change. John Varley, Roger Jenkins, Tom Kalaris and Richard Boath – Barclays’ former chief executive, head of the Middle Eastern business, head of wealth management, and head of corporate finance respectively – yesterday arrived at a criminal court in London to face charges of fraud by false representation relating to Barclays’ raising of £6.1bn of capital from Qatari investors during the financial crisis.

The four men are pleading not guilty. The Financial Times notes that Varley is the most senior banker ever to face a criminal court charge (at least since 2008). Boath, in particular, has claimed to have “repeatedly raised concerns about the decisions taken by the bank with both senior management and senior lawyers,” and to have been “reassured that those decisions were lawful.” Kalaris has been living in upstate New York since 2016. Jenkins has been hanging out in Malibu, California.

Of the four, Jenkins is by far the most colourful. Now aged 62, he married a Brazilian model in September last year, having previously been associated with the likes of Miss Venezuela and supermodel Elle Macpherson. In 2016 Jenkins was said to be investing in a fund acquiring land in California to set up a marijuana business. At Barclays, Jenkins was for many years head of the controversial structured capital markets business, which devised structured products for clients that helped ‘mitigate’ their tax exposure. In 2009, the Guardian wrote an exposé on the business, calling Jenkins – who allegedly earned £40m ($52m) a year for his efforts – one of the best paid men in Britain. In 2005, Financial News says Jenkins earned £75m, making him the best paid person working for a FTSE 100 company.

Jenkins left Barclays in 2009 and Barclays closed its structured capital markets business in 2013 as part of a strategic review. “Although this was legal, going forward such activity is incompatible with our purpose. We will not engage in it again,” said then-CEO Antony Jenkins (no relation) at the time of the closure. Roger subsequently went to Dublin, before joining BTG Pactual as managing partner in 2011. BTG Pactual subsequently had a few problems of its own (which were unrelated to Jenkins).

Like the three other men in London’s criminal court, Jenkins steadfastly denies the fraud charges. His lawyer has said he intends to vigorously defend himself. The Guardian says he is ‘fiercely clever, but abrasive with it,’ and that his success at Barclays was down to his, ‘political skills as [much as] his technical ability.’ Jenkins’ beautiful ex-wife, who reportedly helped woo the Qatari Royal family into investing in Barclays during the financial crisis, says he’s just a ‘very, very nice man.’ Jenkins will now need all that charm to protest his innocence.

Separately, Citi’s fixed income business may not have had a great fourth quarter but things could at least be improving. “Volatility has somewhat moderated and both equity prices and yields have shown signs of stabilization,” said CFO John Gerspach during yesterday’s conference call, before adding the caveat that it’s still early days. CEO Michael Corbat said Citi plans to focus on improving profitability in 2019, which doesn’t seem to augur well for pay.

Meanwhile….

Russin bank VTB cut 100 jobs in London. “We have begun putting our European footprint onto a single platform and transferring our balance sheet from London and Vienna to Frankfurt. It means we can have risk in one place.” (Financial News)

Goldman Sachs, JPMorgan and Morgan Stanley have spent an average of £100m each preparing for Brexit. (Financial News)

Hedge fund manager Crispin Odey is betting that the pound will rebound on the basis that Brexit won’t actually happen after all. (Bloomberg)

Malaysia’s finance minister is upset with Goldman Sachs. “You look at the agony that Malaysia had to endure — not just in terms of the figures but the trauma…You must have a heart. Sometimes you ask, does Goldman have a heart?” (New York Times)

HSBC has processed more than 3m FX transactions worth $250bn using blockchain technology in the past year. (Financial Times)

HSBC says that only 16 hedge funds out of 450 hedge funds were able to deliver positive returns before fees in 2018. (Financial Times)

Lincoln Payton, who spent 33 years at BNP Paribas, latterly as head of Americas corporate finance, is leaving the bank this quarter. (Business Insider)

Joachim Sonne, who spent 20 years at JPMorgan, latterly as co-head of the TMT banking team in EMEA, is stepping down. Burkhard Koep from Morgan Stanley is replacing him. (Financial News)

Greenpeace says Barclays is on the “wrong side of history” after publishing an “underwhelming” climate policy document that fails to rule out funding for tar sands projects. (Guardian)

Francesco U. Garzarelli, the former head of global markets macro research at Goldman Sachs, is said to be joining hedge fund Eisler Capital. (Zerohedge)

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Oh, the timing. As we reported last week, this is the week in which several U.S. investment banks in London (and indeed everywhere) tell employees how much they will receive as a bonus for all their work in 2018. Morgan Stanley, Goldman Sachs and JPMorgan are expected to break the news in the next few days (Morgan Stanley may have done so already). Citi and Bank of America are due to follow tomorrow.

If you’re senior in these banks, your bonus will easily be six figures and may well be seven, and some of this bonus will be paid in cash. In 2017, for example, Goldman Sachs paid the 535 material risk takers in its investment bank (as opposed to its asset management arm or control functions) around $100k each in unrestricted cash. The same year, Morgan Stanley paid 322 people in its institutional securities business an average of £118k ($151k) in cash bonuses. This year’s bonuses will likely be equal, if not higher.

Unlike stock bonuses, which are typically tied up for three years, cash bonuses are accessible immediately they reach recipients’ bank accounts. The only problem is that they typically don’t reach recipients’ bank accounts until mid-February. And rather a lot could happen in London between now and then…

In the very short term, there’s today’s vote on Theresa May’s Brexit deal – due at 7pm this evening. If May loses by more than 100 votes, pundits are warning that it could be “negative” for the pound. If she loses by more than 200 votes, a general election and potential government led by left-leaning Jeremy Corbyn becomes likely. And under a Corbyn government, the pound is expected to fall to $1.15/$1.20 (down from $1.28 currently).

The danger, therefore is, that having had their bonuses announced this week, senior staff at U.S. banks in London could see them eroded by 11% (around £11k) in dollar terms by Brexit ‘issues’ before these bonuses are actually paid and can be converted out of sterling.

Alternatively, of course, Brexit could also mean the dollar value of London bankers’ cash bonuses rises in the next month. Hedge fund manager Crispin Odey is now betting that Brexit’s cancellation will trigger a ‘monster rally’ in sterling. U.S. bank employees waiting on cash bonuses need to hope he’s right.

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A veteran investment banker who has spent more than a decade covering the healthcare sector has left RBC Capital to join renowned venture capital firm Andreessen Horowitz. Nate Chang started at the Silicon Valley VC earlier this month as a partner.

Best known for its investments in social media and tech companies like Facebook and Instagram, Andreessen Horowitz has recently begun dabbling more in healthcare through two biotech funds that launched with a combined $650 million in seed money. Business Insider reported just yesterday that the VC is now looking to use those two vehicles to make more investments in companies that focus on therapeutics and innovative approaches to medical treatment.

The timing of Chang’s hire is likely no coincidence. He spent more than four years as the head of West Coast healthcare investment banking at Credit Suisse before joining RBC Capital in 2017 – his second stop with the Canadian bank. He worked at RBC Capital from 2009 to 2013 following a three-year stint at Morgan Stanley, according to LinkedIn.

Chang’s varied educational background may have provided him a leg up. He received his bachelor’s degree in molecular biology from UC San Diego and worked in the pharmaceutical and healthcare industry for several years after college. He later earned his MBA from Dartmouth’s Tuck School of Business before launching his career in investment banking. Neither Chang or a PR firm representing Andreessen Horowitz immediately responded to requests for comment.

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JPMorgan has been hiring. The bank today released its results for the fourth quarter and the full year of 2018, revealing that headcount in the corporate and investment bank (CIB) rose by 6% last year, or 3,300 people. Almost all the hiring happened in the third quarter, which suggests the bank bulked-up on graduate trainees who tend to join in the summer.

What were those trainees hired to do? A clue comes from today’s figure for technology spending across the bank as a whole. Last year, JPM spent $8.8bn on technology, 14% more than in the previous year. In the past two years, JPMorgan’s technology spending has risen nearly 30%. CEO Jamie Dimon said today that the bank accelerated its investment in technology in 2018. This follows a note to investors last April (where the bank curiously said it spends even more on technology than today’s accounts show), in which both Dimon and Daniel Pinto, CEO of the corporate and investment bank (CIB), said technology spending and hiring was a priority.

A focus on graduate-level technology recruitment might be one reason why average pay per head at JPMorgan’s corporate and investment bank remained static this year, at $188k. – Junior technologists aren’t paid as much as front office bankers and won’t push compensation up. Average compensation in the CIB plateaued in 2018 despite reports last week that JPMorgan was planning to increase the bonus pool for the corporate and investment bank by 3%.

If front office bonuses did indeed increase, today’s results suggest some of JPMorgan’s staff deserve a bigger increase than others.

As the chart below shows, JPMorgan’s equities professionals, M&A professionals and equity capital markets bankers achieved strong revenue increases last year. Its fixed income currencies and commodities professionals did not (in the fourth quarter the bank said credit trading, rates trading, and commodities trading were all problematic and that emerging markets helped ease the pain.) JPMorgan’s ECM bankers in particular out-performed Citi’s, but it’s M&A bankers had an exceptionally strong fourth quarter (revenues rose nearly 40%), which is likely to be fresh in the minds of those allocating bonuses for the year.

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Catriona Early isn’t a programmer, but she’s recently developed a passion for disruptive technology in her role within EY’s Chief Financial Officer Advisory (CFO) Services. “In one of my current projects, I’m working alongside EY data scientists to advise a client that’s using machine learning tools to overhaul its current data analysis,” says Catriona, a London-based Senior Manager, Ernst & Young LLP (“EY UK”), in the CFO Advisory team, who specialises in banking, and covers the Europe, Middle East, India and Africa (EMEIA) region. “It’s challenging but very interesting to find myself immersed in emerging technologies.”

Catriona’s assignment also reflects the wide range of work on offer within CFO Advisory, a multi-disciplinary consultancy team across the globe whose remit extends beyond technical accounting standards to cover sectors such as corporate treasury services, commodities markets, IPOs and M&As. CFO Advisory is part of EY financial services professionals across EMEIA. It employs about 220 people in the UK – mainly in London, but also in Edinburgh, Birmingham and Bristol – and EY plans to increase its UK headcount over the next year, especially from the mid to senior level.

The upcoming recruitment has been triggered by corporate clients demanding more help when navigating an increasingly complex accounting landscape. The pressures facing finance teams – from changing regulations (e.g. International Financial Reporting Standards (IFRS) and US General Accepted Accounting Principles (GAAP) to ongoing corporate restructuring drives – have never been greater.

“The type of work we do in CFO Advisory is both innovative and broad, so the teams need people from many different backgrounds,” says Catriona, who worked for a UK bank before joining EY in 2013. “As well as financial accountants, the EY teams already have colleagues with regulatory reporting, quant, technology and consultancy experience, for example.”

The diversity of people and projects within CFO Advisory means there’s “hardly a dull moment” when you’re working there, according to Catriona’s teammate Gareth Lake, an Accounting Advisory and Structuring Manager, Ernst & Young LLP (“EY UK”). “I typically work on a number of different transactions each week – such as providing technical accounting due diligence support, and transaction accounting and structuring advice – so there’s no monotony or repetition,” he adds. “And a project for a client will usually involve two or three other teams in EY, so I’m working across the organisation and getting to know a broad spectrum of people outside of CFO Advisory.”

Gareth describes the networking opportunities he’s had since moving to EY member firm in London from South Africa in 2017 as “second to none”. “I’ve been able to build up a great network, not just internally, but also in the wider London finance community,” says Gareth, who previously worked for three years at an investment bank, focused on private equity property and M&A.

Catriona is now developing her network beyond the UK. She worked with an entrepreneur client in Dubai for six weeks last year and is currently spending some of her time in Paris on another assignment. “I’ve met some amazing people and tackled some big business challenges while working abroad. And the CFO Advisory team is very well connected across Europe – most of the UK team has a lot of daily interaction with people in other member firm offices,” she says.

Chris Acheson, Ernst & Young LLP (“EY UK”), who also works in CFO Advisory and has recently been promoted to manager rank, says he’s been impressed by how his own managers have helped him progress his career. “EY is a great place to work if you want to move your career in a particular direction,” he says. “For example, I have regular opportunities to talk openly with the partners here about the type of projects I’m most interested in working on, with an eye to my future specialisms.”

Gareth has also had plenty of career-related discussions, both with his line manager and his ‘counsellor’ at EY. “Everyone, even the directors, has a counsellor. They help you look at your career over the long-term and make sure people across the division are aware of your objectives,” he explains. “But you must be very proactive to get the breadth of experience that will set you apart at EY. You need to take full advantage of the work and training opportunities here, and drive your career forward yourself.”

Chris says there’s a “huge amount” of formal in-person and online training available to EY professionals, on topics ranging from accounting updates to artificial intelligence. Meanwhile, the digital-skills-focused EY Badges programme, which upon completion can be displayed on an external site, allows people to display accreditations on their social media channels. “This means your clients and your external network can also see the new skills that you’re building,” says Chris, who worked as a finance business partner for a global telecoms company prior to joining the CFO Advisory services in 2017.

Ultimately, however, Chris says most of his new learning has come on the job. “The key to career success in CFO Advisory is being flexible to the new types of work that you get when working project to project,” he says. “And you have to enjoy working in an open and collaborative environment rather than in a silo.”

Although CFO Advisory is hiring across many different job functions, all new recruits must have “strong soft skills”, says Gareth. “These soft skills are just as important as your technical abilities. You need to show you’re adaptable enough to handle multiple tasks on the same day and to take on projects in areas you’re not an expert in yet,” he adds. “Above all, they want to hire people who are team players and know how to build lasting relationships with clients and with colleagues across EY.”

To find out more about a career at EY please click here

Today is the day that Morgan Stanley announces who’s been promoted to managing director (MD) at its investment bank. Unlike Goldman Sachs, which publishes its managing director list for all to see, Morgan Stanley keeps its MD list confidential – the bank declined to comment for this article.

Not everyone at Morgan Stanley knows who’s been promoted yet – the bank’s full list of new MDs is being circulated internally later today (or so we understand). In the meantime, however, there a few rumours flying around about who got tapped.

One of those on the list is understood to be James Spencer-Lavan, the head of Morgan Stanley’s quantitative investment strategies structuring team in EMEA. Spencer-Lavan, who’s worked at Morgan Stanley since 2010 after starting his banking career as a quant at Merrill Lynch, didn’t respond to a request to comment. However, colleagues say he was one of the lucky few.

Others promoted in Morgan Stanley’s EMEA equity derivatives business this year are understood to include Oliver Höldin, who was last spotted working for Morgan Stanley in Frankfurt, and Jenny Zupan.

We’ll publish further names here as they become available. Morgan Stanley, which is said to have boosted its bonus pool for 2018, is due to announce its results for last year this Thursday.

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Nomura has hired veteran mortgage-backed securities salesperson Lou Rosenfeld as it seeks to continue to grow out its business in the U.S. Rosenfeld started earlier this month in New York as a managing director.

Rosenfeld was most recently at Credit Suisse, but was reportedly caught in a broader series of staff reductions late last year, according to the Grapevine. He was previously a senior managing director at fixed income asset management specialist Good Hill Partners following a three-year stint as a managing director at Goldman Sachs. Rosenfeld cut his teeth at Bear Sterns before the financial crisis. Nomura declined to comment on the hire. Rosenfeld didn’t respond to a request for comment.

Nomura was one of the Wall Street firms that was fined by regulators over claims that it misled investors about the quality of residential mortgage-backed securities that it was marketing in the years leading up to the crisis. The Japanese firm agreed to pay $480m in fines just last year to resolve the decade-old civil claims. Meanwhile, Nomura is actively trying to resuscitate its European business with a new round of hires.

Rosenfeld gave out some career advice when he was a keynote speaker at the 2011 graduation ceremony for his alma mater, George Washington University. “Love what you do and the future it holds for you,” Rosenfeld said. “There’s no shame in trying out an industry and realizing it’s not for you.”

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The Hong Kong branch of Jefferies has taken on senior equity sales-trader Maya Frommer from Goldman Sachs. The hire, which comes just three months after Jefferies recruited two Hong Kong-based JP Morgan bankers, reaffirms the US boutique’s ability to poach from larger players in Asia.

Frommer joined Jefferies earlier this month as a managing director and head of platform sales, according to her public profile. Bulge-bracket-to-boutique moves at MD level are not unusual as the smaller firm typically needs to offer its new hires enticing senior responsibilities. Recruiting bankers in January can also help banks like Jefferies to pick up talent before the more competitive post-bonus season for recruitment kicks in.

Frommer was previously a Goldman lifer, having been with the firm since graduating from Harvard in 2007. She initially worked as a Japan equity sales-trader in Tokyo, before relocating to Hong Kong in 2012 as a pan-Asia equity sales-trader, whose remit included onshore China.

Jefferies has been recruiting from large US banks in Hong Kong of late. In October, it hired JP Morgan’s co-head of APAC healthcare Jun Wu to run its healthcare coverage in Asia and it also took on Alex Yuen, an executive director from JP Morgan’s equity capital markets team, according to Bloomberg.

If you’re thinking of leaving Goldman for Jefferies in Hong Kong, you probably won’t need to change your daily commute. Jefferies’ office is in the Cheung Kong Center, the 68-story skyscraper in which Goldman houses many of its local front-office staff.

But just as Jefferies is taking talent from the bulge bracket, so too is it losing people to the corporate sector in Asia. The bank’s previous Asia healthcare head, Jielun Zhu, left in mid-2018 to become chief financial officer at I-Mab Biopharma. Eugene Huang, a former Jefferies research analyst, is also now a CFO at a Chinese biotech company – he’s working for Suzhou Kintor Pharmaceuticals. Meanwhile, last July, former Jefferies Asia CEO Michael Alexander moved to Block.one, the blockchain software publisher, to lead its $1bn EOS VC venture capital arm.

Have a confidential story, tip, or comment you’d like to share? Contact: smortlock@efinancialcareers.com

Image credit: greenleaf123, Getty

If you’re an analyst or associate in Hong Kong and you specialise in debt capital markets (DCM), it’s increasingly likely that your next job will be at a Chinese bank – if you’re not working for one already. Not only do Chinese banks dominate Asian DCM deals, they’re also hiring juniors in Hong Kong (as well as in Shanghai and Beijing) on the back of this recent success.

Eight of the top-10 banks for 2018 APAC (ex-Japan) DCM revenue are Chinese (HSBC in 7th spot and Citi in 10th are the exceptions), according to new data from Dealogic. CITIC Securities is in first place, with revenue of $267m and a 7% market share, followed by China Securities and Bank of China.

Mainland banks top the table because China is the linchpin of Asia’s dollar bond market. Chinese borrowers made up about 60% of the $198bn of notes sold in Asia during the nine months to September 2018, reports Bloomberg. “If the Chinese DCM market were ever to cool off, we’d see this league table change, but until then other DCM markets in Asia remain comparatively small,” says Sandeep Mohanan, a senior front-office manager at recruiters Morgan McKinley in Hong Kong.

DCM bankers at Chinese firms have the “strong guanxi” needed to win clients and work on deals that typically involve multiple local bookrunners and co-ordinators, says Shanghai-based headhunter Jason Tan. “Chinese banks have in-depth relationships with one another,” he adds. “And they offer smaller fees compared with the foreign banks. The last DCM banker I interviewed admitted that his bank would do a deal for ‘face’ with the client, even if it was loss making.”

While Asian DCM hiring at Western banks is likely to be subdued this year, Chinese banks like CITIC will be adding headcount, including in Hong Kong, where some of their DCM staff are based thanks to the city’s large talent pool in the function. “More staff are needed as the Chinese debt market continues to grow,” says Tan.

This recruitment will focus on analysts and associates with native-level Mandarin skills. “Chinese firms predominantly want junior bankers with sales, financial analysis, due diligence and structuring experience,” says Tan. “Chinese banks’ DCM teams are typically headed by an SVP/MD banker, with an average team size of 12 to 16 people.”

At a senior level, however, Chinese banks aren’t doing much hiring in Hong Kong, which is probably just as well. Rainmakers in the territory still aren’t inclined to work for mainland firms, says Tan, primarily because their company cultures and bonus allocations aren’t attractive enough.

Have a confidential story, tip, or comment you’d like to share? Contact: smortlock@efinancialcareers.com

Image credit: winhorse, Getty

Early in the year, we already have a candidate for the craziest job move of 2019. Andrea Orcel’s move from Head of Investment Banking at UBS to CEO-designate of Santander is off.

How can this be? Well, according to the early news reports, Orcel and Santander had both presumed that he would get some sort of “good leaver” status with respect to his enormous accrued deferred pay. This presumption was based on the fact that Santander doesn’t compete directly with UBS and has been a very good investment banking client over the years. Unfortunately, it turned out to be wishful thinking. UBS demanded the full gardening leave period in Mr Orcel’s contract and uncategorically ruled out allowing Orcel to collect all his deferred bonuses. These were substantial – at around €50m. Santander might have been prepared to compensate Orcel up to €20m, but felt that €50m was an amount that simply couldn’t be justified to their stakeholders. Orcel himself wasn’t prepared to walk away from all that money in order to get the job, and so the deal collapsed.

If this is all there is to this story, then it looks very much like one of Europe’s most successful investment bankers of the last few decades has made some rookie errors. Literally the first instruction in Leaving Your Investment Banking Job 101 is that if something is important enough to jeopardize the move, you need to get it locked down, in writing, before you resign. The details of UBS’s deferred compensation scheme should have been known to Mr Orcel (and to his lawyer) and if they’re like most other schemes, the starting point is likely to be that if you leave, you lose. If Orcel assumed that the rules would be waived for him because he’s so important (not entirely impossible given what people have said about his management style) then well, he’s just found out what happens when you assume.

Having made that error, though, why let it destroy the deal? The clawback details of Mr Orcel’s compensation package aren’t public, but it’s not usually the case that you can get the money back if your job offer falls through. It seems to have always been assumed that Orcel would sacrifice some of the money in order to make the move happen – and to trade UBS share price exposure for Santander with the hope of making more money in the long term. It seems that he’s done the one thing that experienced M&A bankers usually tell their clients not to do; he’s let a strategically vital transaction get away because of price. After all, fifty million euros is a lot of money to most of us, but Orcel was paid $30m in a single year once when he was at Merrill Lynch. Seems like it’s harder to do your own mega-deals than to advise someone else.

Or … or is there something else going on here? When Orcel was appointed, we noted that if you hire a baker, it’s usually because you want to make some bread and if you hire a deal-maker it’s usually because you want to make some deals. If Santander have reassessed their strategy with respect to European consolidation, that might have affected their willingness to make politically unpopular stretches for CEO compensation. We can’t help noticing that the Orcel-to-Santander deal started falling apart almost exactly when stories started hitting the news about German government involvement in Deutsche Bank’s strategic future…

Alternatively, Santander might simply have decided they didn’t like Orcel quite as much as they thought. It’s not at all uncommon for serious problems of cultural fit to be smoothed over during the hiring process, even at CEO level and even for people who think they know each other as well as Andrea Orcel and Ana Botín. If something of this sort had begun to arise (and Mr Orcel is not necessarily known as a particularly collegiate type), both sides might feel it looked better to agree publicly that it was all about the money.

Finally, it’s possible that something else has come up. As of tomorrow morning, Andrea Orcel becomes 2019’s version of Jean-Pierre Mustier, the guy whose name gets attached to every job that might be vacant. After all that’s gone on, he’s probably not in the running to succeed Sergio Ermotti, but he would surely be a contender if the Deutsche Bank CEO turnover machine had another round, or if Credit Suisse decided that Tidjane Thiam had been given enough of a chance. There are even several banks which are currently involved in scandals that easily lead to situations where Global Heads have to roll.

For the time being, though, 55 year-old Orcel is likely to tend his garden, avoid reading the newspapers and start looking around for a hedge fund or infrastructure investor to spend the next few years at, planning his return. It’s very unlikely we’ve seen the last of him.

Separately, an even more dysfunctional story presents itself at Moody’s in Paris, where what looked like a standard tale of management harassment turned out to have a twist. A junior female analyst criticised a male Managing Director over the way his team had done some analysis. Pretty soon after, the MD started putting negative comments in her annual review. He then filed a series of complaints with HR accusing the junior of harassing another female analyst. After taking a look at what must have appeared to be a textbook case of retaliation, Moody’s fired the MD.

So far, a typical and unedifying story of finance… But, and as emerged when the MD sued in a French labour court, the original “victim” had been harassing her female colleague, who had made four separate complaints to the MD about her “offensive and nearly abusive” attitude. What a working environment that must have been. The court has ordered that the managing director be reinstated and paid over €1m in back wages and stock compensation.

Meanwhile…

Andrea Orcel sprinkles his speech with references to luxury brands. (NYT)

Just when the banks had been about to make some progress on gender diversity on the trading floor, someone tells them to add a load of computer programmers. The quest to break through the overwhelmingly male culture continues; some of the worst behaviour is now beginning to be brought under control, but introducing family-friendly policies is still a struggle. (Financial News)

The cultural issues for women on portfolio management are less obvious, but just as real – here’s some advice (FT)

Not so long ago, Cantor Fitzgerald’s Sage Kelly was the ultimate poster model for bad banker behaviour. Now people are so keen to work for him that they’re prepared to run the risk of being sued (in this case, by Jeffries) to do so. (Bloomberg)

Earnings season continues and it looks like JP Morgan didn’t have a vintage quarter (FT)

The Barclays Euribor rigging trial has begun (FT)

The Nightmare Before Christmas; BNP lost $80m on a derivatives book while the head of trading was on holiday (Bloomberg)

The “housing ladder” is an arithmetical impossibility and there is no point buying rather than renting your first home as a banker (FT)

Chair of EY UK: “Based on advice from the chancellor on a briefing call tonight we will continue to advise our clients to plan for a no-deal Brexit.” (FT)

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Deloitte is on the hunt for talent as it gears up to help its clients prepare for a raft of new accounting standards. After a period of little change, three International Financial Reporting Standards (IFRS) are being introduced over a relatively short time.

IFRS15 on revenue recognition became applicable from 2018, while IFRS16 on leases will come into force from 2019, and IFRS17, governing insurance contracts, will kick in from 2022, after being postponed from a 2021 start date.

Lal Manglani, partner, advisory at Deloitte, says: “With all these changes coming in, there is a lot of demand from companies for experienced people who understand the content of these standards and possess implementation knowledge and experience.

“Implementation of each standard takes effort. The amount of work out there is very large. Our existing teams are already being fully utilised on a lot of these projects, but there is even more demand in the market.”

While IFRS17 only impacts insurers, IFRS16 has implications for a wide range of companies including those in telecoms, banking, insurance and retail, as well as airlines and firms involved in shipping and transportation. Manglani explains that the standard affects everything from office leases to the leasing of professional equipment. It is also a complicated standard to implement.

Christine Chao Wen, Assurance Partner at Deloitte, says: “I have to communicate to our clients that while IFRS16 looks straightforward to implement, it is actually very difficult in practice.” She explains that a large amount of leasing data needs to be collected under IFRS16, and this represents a huge challenge for many companies.

The new standard is also expected to significantly impact companies’ reported earnings, assets and liabilities, while it will change the classification of expenses and cashflows.

To help clients prepare for the transition Deloitte has created two new service lines, namely a compliance accounting team and a specialist IFRS16 service team. This is because in addition to implementing new standards, clients often require assistance with existing standards – either to embed processes into business as usual, or when businesses change or evolve.

Wen says: “We want to have more talent join us to serve more clients and help them with the transition and implementation of accounting standards.”

Deloitte has also developed a range of tools using automated technology to help its clients understand the new standard, including accelerators to prepare forecasts for them on the impact the new standard will have on their future performance.

Manglani says: “Our expertise comes in terms of not only helping clients understand the requirements and how to implement them, but also evaluating the different options available within the standards and which ones will work better for them.

“Companies welcome the support from other professionals on how to solve issues and come up with more than one idea on implementing the standards. That is where clients really appreciate us being at the table with them.”

To handle the demand created by the implementation of the accounting standards, Deloitte is looking to recruit new talents for a variety of roles. Manglani says: “We are not only looking for senior people at manager or associate director level to help lead the engagements, we are also looking for people who will help us perform some of the detailed work our clients will require us to do.”

In terms of geographies, it is looking to meet demand in Hong Kong and China, particularly in the major cities, as well as across South East Asia, which Deloitte services from Singapore, and in Australia, Korea and Japan. “The nature of the issue is such that virtually all companies across Asia and the world generally are being impacted,” Manglani says.

Deloitte is not only looking for people with professional accounting qualifications from organisations such as the Chinese Institute of Certified Public Accountants and the Hong Kong Institute of Certified Public Accountants, but also those with the skills to communicate the new standards to clients and understand what impact they will have on their business.

Wen adds that they should also be fast learners, so that they can get to grips with the standards quickly and help clients develop a successful blueprint for implementing them.

Manglani agrees: “If we have people who are hungry for knowledge and interested in learning, we are able to pass on our knowledge to them and have them go out and do the same to our clients.”

As one of the Big Four accountancy firms, Deloitte offers its staff a number of benefits, including global opportunities. Manglani explains: “Being a global firm we are working more and more closely with our member firms across Asia, Europe and the US. “We provide opportunities for people to leverage on the knowledge that is collectively gained within the organisation. We also give people the ability to move across different locations and broaden their experience.”

Wen points out that Deloitte is a very caring employer, with Deloitte China recently introducing free critical illness care for employees’ parents. She has also been impressed with the way Deloitte supports its talents’ career development, particularly for women.

She explains that after joining Deloitte in 2010, she had a baby. When her daughter was 6 months, her mother and father had cancer . “Deloitte gave me flexible working time to enable me to take care of my family and do my job at the same time. I did that for almost two years.

“I also had the chance to join the assurance advisory team. I am now a partner. I never thought I would be a partner one day because I was prioritizing my time between my family and work for almost 2 yearsbut Deloitte gave me the chance to develop my career. I really appreciate that.”

Manglani echoes this, pointing out that giving people the opportunity to advance their career is something that is cherished by the firm. “Learning is part of our DNA and we support our employees very strongly in terms of enhancing what they know and learning new things.”

He adds that Deloitte not only provides staff with technical training, but it also helps them improve their soft skills, as these are extremely important in terms of how they come across to clients. Employees who are working for new qualifications are also offered support through internal training and mentorships.

Manglani thinks the current raft of new standards being introduced offer a great opportunity for accountants. He says: “These are large and very interesting projects. If you are looking for something interesting to do in your career and you want to grow your knowledge, then you need to come and join us.”

I started working in finance in 2002, joining an investment banking graduate programme. With a mere bachelor’s degree I was streamed into the ‘analyst’ class. Sitting alongside me were several trainees with PhDs in mathematics; one already had several published papers in option pricing. The more prestigious ‘associate’ class was reserved for the true elite: recent MBA graduates.

That was a long time ago: this year’s cohort of banking analysts were still in pre-school when I joined banking. Whilst they have been growing up the usefulness of MBAs in banking has withered away.

To see why, let’s consider the reasons why MBAs were once so important: relevant content, signalling, filtering, and networking.

Why was the content of MBA courses relevant to banks in the past?

You might assume that prospective bankers take MBAs because they teach you how to be a banker. Indeed at one time that was pretty close to the truth. In the distant past, the most important activity in banking was M&A: mergers and acquisitions, including initial public offerings (IPOs). Good M&A rainmakers needed (and still need) the sort of generic business knowledge that is the bread and butter of MBA courses.

Two decades ago, not all MBA students went into M&A. Some went into equity research, where their main job was to promote the M&A business. In equity research, the main quantitative skill required was the ability to value companies using discounted cash flow analysis (DCF). More mathematically inclined MBA students could pick up a modicum of knowledge about financial engineering; easily enough to impress the average corporate treasurer.

However, when I went into banking in the aftermath of the tech bubble, the importance of M&A and IPOs to banks’ revenues was already in a secular decline. That trend has continued since. Yes, M&A businesses had an excellent fourth quarter of 2018 but today, more companies can raise money whilst staying private, and many of those that are public prefer to use their cash for buy backs. Meanwhile MIFID II is the latest of many nails in the coffin of equity analysts.

The real problem, though, is that banks and hedge funds don’t need business generalists anymore. The elite of this year’s graduate class will be students who can code and who understand machine learning. Traders increasingly have masters or PhDs in highly quantitative subjects; simply understanding how to do a DCF is no longer enough.

Why did bankers want to study top MBAs?

With the exception of accountancy and law most degrees have little relevance to the jobs students end up doing. So why bother doing them? It’s because they act as signals to employers that an employee is worth hiring.

An MBA signals to a firm that a prospective employee is deeply committed to banking. Doing an MBA is arduous and often dull – just like many jobs in banking. They’re also expensive; both in fees and the opportunity cost of lost income. An employee with an MBA must really want to be a banker.

Banks get hundreds or thousands of CVs for each positions. A busy hiring manager isn’t going to waste hours looking at each one to decide who is worth interviewing. This is where filters come in. A junior HR person can filter out applications that don’t have certain minimum requirements.

Adding ‘MBA essential’ to a job was therefore once an easy way for lazy firms to reduce the number of CVs they reviewed in detail. This outsources the job of finding good candidates to university admissions staff. Just getting accepted for a prestigious MBA is difficult, so if you’ve managed it your CV is probably worth considering.

Employers still use filters, though most are now automated. At the same time, the net is cast wider. Masters in Finance, Financial Engineering, or Econometrics qualifications from top schools are as prestigious as many MBAs. Completing them is tough – in terms of quantitative skills much tougher than the average MBA – making them an excellent signal. They are also more relevant to the bankers of today.

Is it worth doing an MBA for the networking opportunities?

Perhaps the biggest advantage of an MBA was the networking opportunity it provided. If you were going into M&A or sales trading then a rolodex full of future CEO and CFOs would be extremely useful.

Personal contacts are still useful in getting through the door, but they won’t close the deal. Forget ‘relationship banking’: strict regulation and fee pressure mean that a corporate or buy side firm has to come up with a very good reason not to pick the best deal.

Is this the end of the MBA?

MBAs will be a smaller part of financial recruitment in the future, but they shouldn’t disappear entirely. Many MBA schools are updating their courses, by including modules on coding and machine learning, whilst still keeping the generalist nature of the qualification intact.

Importantly firms without diversity of backgrounds and opinions are no fun to work in, and the resulting ‘group-think’ can have serious consequences. Too many MBAs who all think the same is bad, but hiring a team composed entirely of Phds in physics would be equally damaging. Indeed I would argue that group-think amongst banking Phds partially caused the 2008 financial crisis!

Robert Carver has worked on the sell side – as a trader of exotic options – and on the buy side: he is a former head of fixed income at quantitative hedge fund AHL. He has a BA and Msc – no MBA, which probably makes him biased. Robert is the author of ‘Systematic Trading’ and ‘Smart Portfolios’817.

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Despite recent work-life mandates, junior bankers still put in marathon weeks, averaging north of 80 hours at some investment banks. Most are paid handsomely as well, at least compared to what other people their age are taking home. Of course, not every bank pays the same or works their junior staff at the same level. So which of the top banks offer the sweet spot: strong compensation and doable hours?

To find out, we dug through the numbers from the recent investment banking report from Wall Street Oasis. In the chart below, you’ll see the average take-home compensation (base salary plus bonus) for first-year analysts at most every major bank as well as a handful of thriving boutiques. We then cross-referenced the pay data with the average work hours at each firm to find out what one can expect to earn for every minute spent in the office.

The main takeaway is that, for the most part, the grass isn’t much greener on the other side of the fence. Generally speaking, junior bankers who work the greatest number of hours are better compensated on an hourly basis than those who don’t put in as much face time. The average work week is over 80 hours at Perella Weinberg, the firm with the highest hourly rate. Evercore, which also has long working hours, also pays a high hourly rate.

Meanwhile, Goldman Sachs and J.P. Morgan analysts work some of the fewest hours – around 72, on average – but receive lower hourly pay. If you want to work for a major bank and to receive high pay on an hourly basis, Wall Street Oasis’ figures suggest you need to try Bank of America.

Because junior bankers work such long hours, their hourly pay figures aren’t nearly as impressive as you might expect. Perella Weinberg analysts make just less than $40 for every hour they work. At Goldman Sachs and J.P. Morgan, analysts earn just more than $32 per hour. Deutsche Bank analysts take home around $28.50 for every hour they put in – worst among the banks with enough data points to be statistically significant.

The question is whether an additional $8 to $12 per hour is worth the extra eight to 10 hours spent in the office every week. Some may argue no and would prefer to be with one of the firms further down the list.

How much do you earn per hour at an investment bank?

***Note: The research includes self-reported data over a rolling three-year period to accumulate enough statistically significant data points. Average wage per hour worked assumes 52-week year.

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As with JPMorgan, so with Goldman Sachs. Goldman reported its fourth quarter and full year results for 2018 today and revealed that the two banks are both fishing in the same pool for talent. They both want….technologists.

“Headcount increased 9% during 2018, reflecting an increase in technology professionals and investments in new business initiatives,” said Goldman in the notes accompanying today’s release. The firm added 3,000 people last year, but average compensation per head fell (to $337k).

At Goldman Sachs, ‘new business initiatives’ mostly means Marcus, the firm’s new online consumer bank. In the U.K. Goldman is adding 250 people in a new Marcus-focused office in Milton Keynes. In the U.S. it’s hiring around 200 people in Dallas. As we reported last week, Goldman is having trouble attracting interns to its U.K.-based Marcus operation. The firm today confirmed that it also wants to build a cash management business in 2019, along with an alternative investing platform, and a mass-affluent business for Marcus.

It’s Goldman’s enthusiasm for technology and therefore technologists, however, which really stands out. If Goldman added around 500 people from Marcus in the past year, it’s safe to assume that a high proportion of the other 2,500 hires were in the technology division. The firm increased technology spending to $1.023bn last year, an increase of 14%. JPMorgan also increased its 2018 technology spending by 14%, to $8.8bn. That the two top tier banks in the industry are ramping up their technology spending in tandem is an indication of where the big growth in the industry is now.

As Goldman focuses on growth under David Solomon, the firm also said today that it plans to, “leverage technology to create best-in-class client experience across more products,” in sales and trading and to use technology to “invest for scale.” There’s no mention of hiring extra M&A bankers or traders – however well Goldman’s M&A business did in the fourth quarter.

Around 51% of the 1,424 jobs Goldman is currently listing for experienced personnel are in its ‘engineering’ division. Today’s results, and the accompanying presentation, suggest engineers will only become more important at Goldman Sachs in future.

Follow @MadameButcher

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Meanwhile….

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Meanwhile…

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