h)NûTHEû"ANKûOFû*INZHOUûCASE ûWEûSEEûTHEûGOVERNMENTûISûTRYINGûTOûSUPPORTû
the troubled bank and minimise the impact on the capital markets”
MOODY’S VICE PRESIDENT DAVID YIN, P
Citi scales back equities
ambitions, slashes staff
CITIGROUP appeared to scale back its
ambitions in global equities trading and is
instead becoming a leaner player with plans
to cut hundreds from its trading group.
4HEûlRSTûTRADERSûSTARTEDûLEAVINGûLASTûWEEKû
"LOOMBERGûREPORTEDûASûMANYûASûûPEOPLEû
may have been cut, mainly from New York
and London, including cash equities and
derivatives traders.
Citi plans to cut a couple of hundred staff
across its equities and other markets business in
THEûNEXTûCOUPLEûOFûMONTHS ûACCORDINGûTOûSOURCESû
One person familiar with the bank said the cuts
WILLûBEûCLOSEûTOûûANDûSAIDûTHEûLAYOFFS ûTHOUGHû
centred on equities, will also include other
SEGMENTSûINCLUDINGûlXEDûINCOME ûCURRENCYûANDû
commodities trading, and will mainly hit the
bank’s bigger markets in New York and London.
4HEûMOVEûEFFECTIVELYûENDEDûSPECULATIONû
that Citi would make a play for some
portion of Deutsche Bank’s equities trading
BUSINESSûFOLLOWINGûTHEû%UROPEANûBANKSûEXITû
from the business.
4HEREûISûAûSENSEûTHAT ûWITHûSOMEû%UROPEANû
banks retreating, there is market share up
FORûGRABS ûSAIDûAûTRADINGûEXECUTIVEûATûAûRIVALû
bank. But there is also a lot of competition
for that share, and some banks are in a
stronger position to take it, he said.
4HEûTOPûTHREEû53ûBANKSûINûEQUITIESûAREû
-ORGANû3TANLEY û'OLDMANû3ACHSûANDû*0û
Morgan, and they have been aggressively
defending that turf.
)TûWILLûBEûDIFlCULTûTOûCHALLENGEûTHEûLEADERS û
ANDûPOTENTIALLYûEXPENSIVE ûTHEûBANKERûATûAû
rival to Citi said.
TARGETS
4HREEûYEARSûAGOû#ITIûSETûAûGOALûOFûTAKINGû
53M
MûINûREVENUEûPERûQUARTERûFROMû
EQUITIESûTRADINGû4HEûBANKûTOOKûMOREûTHANû
53MûPERûQUARTERûONûAVERAGEûLASTûYEAR ûUPû
FROMûABOUTû53MûTHEûPREVIOUSûYEARû4HATû
was on a par with gains at the other US banks
in a strong market for equity trading.
Equities trading revenues have declined
across the industry this year, however. Citi’s
SECOND
QUARTERûEQUITIESûREVENUESûWEREû
53M ûDOWNûûFROMûAûYEARûAGO ûINûLINEû
with a slowdown across the industry.
&)##ûTRADINGûISûALSOûINûAûMULTI
YEARû
DECLINEû!CROSSûTHEûBIGûlVEû53ûBANKS û&)##û
REVENUEûFELLûABOUTûûFROMûAûYEARûAGO ûWITHû
all banks seeing declines. It was the fourth
quarter in a row in which FICC revenue fell
ACROSSûTHEû53ûBANKSû
ûANDûWASûTHEûWEAKESTû
SECOND
QUARTERûPERFORMANCEûINûlVEûYEARS
“Citi is clearly going to hold its position in
FICC,” the rival banker said. “But that may
COMEûATûTHEûEXPENSEûOFûITSûAMBITIONSûINû
equities trading,” he said, meaning that if the
bank were to be pushed to make overall cuts,
it would likely opt to slim down equities.
4HEûCUTSûCOMEûASû#ITISûlRSTûNEWûCHIEFû
lNANCIALûOFlCERûINûAûDECADE û-ARKû-ASON û
assumes the role. It’s unclear how much
pressure Mason, who took control in
February, is bringing. Mason has been with
#ITIûFORûûYEARSûANDûHADûBEENû#&/ûOFûTHEû
INSTITUTIONALûCLIENTSûGROUPûSINCEû ûSOûHEû
has a deep understanding of the trading
group and is in a unique position to shake
things up.MERGER WITH PRIME
Citi last week said it would merge its
equities business with prime brokerage and
other securities services under a major
SHAKE
UPûOFûITSûMARKETSûBUSINESS ûWHICHûITû
said was because industry competition is
intensifying.
4HEûNEWûDIVISIONûWILLûBEûCALLEDûEQUITIESû
and securities services (ESS) and will bring
together the previous equities and prime,
futures and securities services businesses
(PFSS), Citi said in a memo to staff seen by
IFR.
Dan Keegan, Okan Pekin and Murray Roos will
head the division. Keegan and Roos were
PREVIOUSLYûCO
HEADSûOFûEQUITIESû0EKINûWASû
head of PFSS.
%33ûWILLûINCLUDEûTRADINGûANDûEXECUTIONû
CAPABILITIESûFORûELECTRONICûANDûCOMPLEXû
STRUCTUREDûPRODUCTS ûlNANCINGûANDûHEDGINGû
solutions, clearing, custody and funds
services, the memo said.
Chris Glauner will be the global chief
OPERATINGûOFlCERûFORû%33ûANDûTHEREûWILLûBEûFOURû
regional heads: Cedric Pauwels will lead North
!MERICAûChris Cox will manage Europe, the
-IDDLEû%ASTûANDû!FRICAûRicardo Hesse will run
,ATINû!MERICAûANDûJulia RaiskinûWILLûHEADû!SIA
4HEûMEMOû
ûSENTûBYû#AREYû,ATHROPûANDû
!NDYû-ORTON ûCO
HEADSûOFûMARKETSûANDû
SECURITIESûSERVICESû
ûSAIDûTHEûCHANGESûWEREû
made due to heightened competition.
h!SûTHEûINDUSTRYûCONTINUESûTOûCONSOLIDATEû
and margin pressures intensify, clients are
LOOKINGûFORûSOLUTIONSûTHATûDELIVERûBEST
IN
class services,” the memo said.
“Consistent with this evolution, we
believe that now is the time to create an
INTEGRATEDûOFFERINGûSUPPORTINGûTHEûPRE
TRADE û
EXECUTIONûANDûPOST
TRADEûREQUIREMENTSûOFû
our clients.”
Philip ScipioJP Morgan bolsters Aussie equities
JP MORGAN has bolstered its equities team Down
Under with four hires, including two
EXECUTIVESûRECENTLYûLETûGOûFROMû$EUTSCHEû"ANK
Mathew Tricks is joining the bank as senior
SALESPERSONûINûEQUITYûDISTRIBUTIONû4RICKSûSPENTû
more than two decades at Deutsche and was
most recently director for equity research sales.
Bob Chen is also joining from Deutsche as
ANûANALYSTûINû0û-ORGANSûEMERGINGû
companies team. He previously spent
AROUNDûlVEûYEARSûATû-ACQUARIEû'ROUP û
STARTINGûINûMIDDLEûOFlCEûBEFOREûTRANSFERRINGû
TOûAûFRONTûOFlCEûROLEûINûASSETûMANAGEMENT
0û-ORGANûHASûALSOûHIREDûLevi Spry as senior
analyst covering the mining sector. He spent
THEûLASTûlVEûYEARSûASûTHEûSENIORûMETALSûANDû
MININGûANALYSTûATû*#0û)NVESTMENTû0ARTNERS û
THEû-ELBOURNE
BASEDûEQUITYûFUNDûMANAGERû
that recently closed down.
Alistair Harvey is joining the US bank as a
mining sector analyst. He most recently
WORKEDûASûAûGEOSCIENTISTûATû!USTRALIANûGOLDû
miner Evolution Mining.
*0û-ORGANûHASûBEENûUPGRADINGûITSû
equities capabilities in the region
recently even as revenues across the
Street have sagged. Last year, it moved up
one place in Coalition’s rankings for
!SIANûEQUITIESûTOûJOINTûTHIRD ûTIEDûWITHû
Goldman Sachs.It has also been adding to its headcount in
!USTRALIAûINûPARTICULAR ûHAVINGûPULLEDûOFFûAû
MAJORûCOUPûINûûWHENûITûHIREDûFORMERû
Goldman Sachs trio Dyson Bowditch,
!NDREWû4ANNERûANDû3TEVEû-AARTENSZ
)TûISûONEûOFûSEVERALûlRMSûTOûPOUNCEûAFTERû
Deutsche announced last month that it was
shuttering most of its equities business in
!SIAûASûPARTûOFûAûGLOBALûRESTRUCTURING
#,3!ûHASûALSOûADDEDûHEADCOUNTûINûEQUITYû
research and equity sales as part of a wider
HIRINGûSPREEûFOLLOWINGûTHEûRECENTûEXODUSûOFû
MOSTûOFûITSûSENIORûSTAFFûINû!USTRALIAûTOû
*EFFERIESûSEEûSEPARATEûSTORY
Thomas Blott