People keep leaving Bank of America’s European equity derivatives business. Following several senior exits in the past few weeks, the team has been hit by further resignations.

The latest exits are understood to include Rene Maier, a managing director and head of equity derivative sales for Germany, Austria and Switzerland, and Louis de Vuyst, a French equity and fund derivative salesman.

Maier is joining Credit Suisse as head of head of structured equity derivatives sales for Germany. De Vuyst is said to be joining Goldman Sachs and is understood to have resigned last Friday.

Neither BofA nor Goldman Sachs responded to a request for comment.

Maier’s move comes as Credit Suisse continues building out its equities business under Mike Stewart whom it hired from UBS in December 2016. As we reported last month, Credit Suisse lost several of its senior equity derivatives professionals last year, five of whom have now reconvened at hedge fund Pluris Capital.  Maier’s arrival at CS comes as the Swiss bank has been building up its German equity derivatives team. It marks the third big hire Credit Suisse has made from Bank of America in the past year following the recruitment of Michael Ebert and Mike Herarty in the U.S. in August and October respectively. Stewart spent eight years at Bank of America and Merrill Lynch before joining UBS and appears to be recruiting his former colleagues.

Meanwhile, De Vuyst’s arrival at Goldman marks a further expansion of the GS French equity derivatives business – although it’s not clear whether he’ll be in London or Paris. 

In other equity derivatives moves, Atish Mistry recently joined Natixis’s equity solutions sales team after leaving Deutsche Bank. And Irene Brunner, a Swiss-based DB MD is understood to be off to BNP Paribas.

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““

Have you really thought about what life is like working for an investment bank? Before you decide on your career path and start applying for internships or full-time IB analyst or associate programs, ask yourself these eight questions.

1. How important is work-life balance to me during the first years of my career and beyond? 

Investment banks have made some effort to reduce working hours for analysts by introducing a protected day on the weekend when work is supposedly off-limits, or early finishes on Fridays, but get real – the hours are still long. In IBD, you have to be ready for an MD to throw work on your desk at the last minute thanks to an urgent pitch, meeting or a request from a client. In markets roles, banks expect you to be available even when clients aren’t trading.

“While hours on the job and work-life balance improve as one becomes more senior, even senior bankers put in lots of hours,” says Janet Raiffa, former recruiting manager at Goldman Sachs and career adviser.

If you cherish your time and enjoy spending it with friends, traveling or playing, then Wall Street may not be for you, says Roy Cohen, career coach and author of The Wall Street Professional’s Survival Guide.

“This is standard operating procedure when you begin your career,” he says. “You belong to the firm – it is a form of indentured service.

“You get the benefit of experience and a pedigree at a name-brand firm and they get the right to own your time and life early on in your career.”

2. How do I operate under pressure?

For entry-level candidates – both analysts and associates – Wall Street is a grind.

“All-nighters, weekends at the office, tight deadlines and bosses who score low on emotional intelligence, or EQ, are the norm,” Cohen said. “You either accept it as a rite of passage or you get marginalized quickly.”

3. Am I really someone who enjoys working in a fixed team structure?

While nobody wants to admit that they are not a “team player,” are you actually someone who enjoys working in teams versus being an individual contributor?

“In entering banking, you will play a pretty fixed role as an analyst and associate, and even as you move up the ladder you will be locked into set relationships with those on your teams,” Raiffa said. “There are other areas of finance that allow for more independence and entrepreneurial work earlier on.”

4. Do financial models excite me?

Be honest. If your brain is not wired to handle numbers and mathematical complexity, then you are not likely to be well-suited to succeed as an entry-level candidate, Cohen said.

“At the start of your career on Wall Street, you will spend much of your time building financial models,” he said. “The expectation will be for you to accomplish this task with speed, ease and accuracy.”

5. Who are my role models?

If they are more closely aligned with Rosa Parks and Mother Teresa than with Warren Buffet and Lloyd Blankfein, then you may need to reexamine your priorities, Cohen said.

“Wall Street is either about the pursuit of wealth or the challenge of finding solutions to complex financial situations,” he said. “Although it can be argued that the latter help to elevate the world, at its core investment banking is not driven by doing good, so if that is your passion, then you are on the wrong track.”

6. Am I OK with being fired? 

“Reviews in investment banks can be brutal, with reviewers being encouraged to detail unfavorable aspects of a reviewee’s performance, 360-degree reviews and rankings being doled out on a very large number of categories,” says Raiffa. “In a down market, bankers may be laid off not for any specific performance issues or mistakes, but because they are in the bottom quartile amongst very talented and high-achieving peers.

“They also may be doing well, but lack of revenue in the division or sector may necessitate layoffs,” she says. “Even making it to the partnership level is not a guarantee of continued employment, and partners are regularly forced into early retirement.”

7. How committed to investment banking am I really? 

Graduate recruitment is a competitive process and there are plenty of qualified candidates. What makes you different, better and likely to be successful?

“Will you bend over backward to convince them that your commitment is undivided, that you will exercise good judgment and that you have demonstrated through prior experience an ability to break through barriers?” Cohen says.

8. Am I doing it for the exit options?

Only the best investment banking analysts make it to private equity. You may therefore be going into banking long-term.

“You’ll need to have worked on a good number of deals to successfully pitch yourself to PE, and certain practice areas like M&A and leveraged finance work may be attractive to PE employers whereas other practice areas may not be,” Raiffa says.

Ask yourself: If you are able to move into a buy-side role, will it actually be that much better than IB in terms of compensation, stress and lifestyle, and what will the downsides be? Do you need to start in IB to get to the industry you really want versus pursuing them straight out of college or business school? Maybe so, maybe not.

Follow @danbutchrwrites

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““

So you want to become a managing director at Deutsche Bank? Good for you. Yes, the German bank’s share price has fallen 9% in the past week. Yes, DB has not ruled out further large cuts to its investment bank.  Yes, some people have gone already and the redundancy payments aren’t said to be great.  But hey! – Deutsche Bank is paying biggish bonuses on top of its big salaries. Deutsche is also hiring (often from Goldman Sachs). And it’s promoting (to managing director).

Financial News reports that DB has promoted 10 people to MD in London in its latest promotion round. They are: John O’Connell (European head of ABS sales), David Joughin (EMEA head of repo), David Ibáñez (a TMT banker), Reinhard Kuehn (an automotive and capital goods banker), Vanessa La Santa (head of markets compliance Emea), Antti Kari (equity derivative sales for Nordic clients), Ross Dungan (global head of listed derivatives operations), Tom Adlard (equity structuring and quantitative investment solutions), Pippa Newbold (FX and derivatives technology), Brett Hames (head of business and client intelligence unit, anti-financial crime), and… Michael Zolotas (head of shipping and logistics investment banking).

An eleventh promotion (omitted from Financial News’ list) is Tim Carey, a tech professional and head of global markets production at DB.

Our own analysis of the career paths of Deutsche’s shiny new MDs suggest there are two main routes to the top at DB: either you join as a director from a rival firm, or you work your way up at Deutsche.

Of this year’s promotions, around 50% are director joiners and 50% are DB lifers. Of the director joiners, the most speedy transition to MD was made by David Ibáñez, who came from Goldman in 2016; the least speedy was made by Vanessa La Santa, who joined in 2008 from trading company Bear Hunter Structured Products. By comparison, the DB lifers took between 14 (Reinhard Kuehn) and 18 (Michael Zolotas) years to get to the top.

Deutsche insiders said the bank’s method of selecting its managing directors had made great strides since 2014 when it was based upon a highly political process involving, “lots of excel spreadsheets” and, “panels of MDs” who interviewed potential MDs and then referred them to a big committee.

Nowadays, Deutsche selects its MDs in a manner more akin to Goldman Sachs and Morgan Stanley, says one senior insider. “There’s a complicated matrix of regional, product and role and the global global heads of the businesses have to work with the local heads to force rank everyone within that region,” he tells us. “Each region gets an allocation of promotions and the global heads can swap out a promotion in London with a promotion in Asia for example.”

The big committee still exists, however. “It’s made up for all the senior corporate and investment bank managing directors,” says the DB insider. “Everyone is scored and discussed in mid to late autumn at promotion round tables.”

Like other banks, insiders say DB suffers two problems at promotion time. Firstly, it has too many expensive senior staff already. Secondly, mid-ranking staff need to be kept happy with bigger titles.

“It’s been such a hard five years at Deutsche that MD titles are given away just to persuade people to join and stay,” says one DB markets professional. “In some cases the pyramid is deeply inverted,” he adds.

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““

It’s not easy moving on from a trading job in an investment bank. Not everyone can work on the buy-side, let alone in a hedge fund. Not everyone can make a living working in fintech. Plenty of former traders disappear. Plenty of others become “consultants” or lie low, sometimes for years.

“I’ve seen many senior bankers go into consulting, and based on the specific areas of banking they knew really well, they find a fit with the areas where the firm was consulting in, so they become an industry expert within the consulting firm,” says Jeanne Branthover, managing partner at recruitment firm DHR International.

Many of last year’s disappearances were at KCG, which let numerous traders go after its acquisition by Virtu Financial. Greg Tusar, for example, spent 13 years at Goldman Sachs, latterly as a partner and the global head of electronic trading before joining KCG Holdings in 2013. He left KCG in July. In November, he became the CEO of Greywolf Consulting.

Other former KCG staff have also gone into consulting. Jon Ross, the former CTO is now working as an independent consultant. However, Charlie Susi, the former head of client electronic trading who was previously an MD and co-head of direct execution and e-trading at UBS, is lying low after leaving KCG in June 2017.

Another ex-trader who’s now consulting is Matt Senecal. Senecal was more quant than trader, having been global head of “Quant HQ” at UBS before leaving in 2016. He too has been consulting since the start of this year.

Of course, not everyone who exits a trading floor become a consultant. Todd Sandoz left Nomura in late 2016 after three years with the Japanese bank and a previous 17 years at Credit Suisse. He now appears to be setting up a family office.

And then there’s Chris Rogers, who spent eight years as the CTO of Instinet, Nomura’s brokerage and execution services subsidiary, before leaving about four years ago. He’s been traveling the world ever since and hasn’t looked back.

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““

Most people in banking are working towards a “number” – a certain net worth when they will retire. Goldman Sachs Chairman/CEO Lloyd Blankfein’s pay last year alone was $24m. Realistically, he probably flew past his number years ago. Blankfein’s continued employment suggests that the number is immaterial and it’s more about the love of the job.

Blankfein said that his wife doesn’t think he should step down, and neither does he – for now.

“The government doesn’t seem that available for me and I’m not sure I want to die at my desk, so that creates a problem,” Blankfein said. “I don’t think I’m destined to leave because I’m finding something else attractive, I just think I’m going to have to have the discipline to leave when I want to stay.”

If leaving before you’re ready is a good thing then it might even be a good thing to be made redundant. That might soon become a reality for some Goldman FICC traders.

Goldman, for decades Wall Street’s dominant commodities trading firm, has lost its place among the top three banks in the sector for the first time, according to research firm Coalition.

Separately, being in the public eye can be dangerous, and Wall Street CEOs are not the most universally beloved human beings on the planet. Hence, J.P. Morgan Chase chairman/CEO Jamie Dimon gets a big protection allowance.

Dimon’s total 2017 compensation of $28.3m included perks such as personal use of corporate aircraft ($74k), personal use of cars ($30k) and the cost of “residential and related security” ($48.3k). But the bulk of his pay came in stock awards ($21.5m), bumped up after a year of record annual net income of $26.5bn, excluding the effects of the tax reform, on record revenues of $104bn, according to the FT.

Dimon earned as much in a day as the typical employee at his bank took home in the whole of last year – 364 times the median employee, who received $77,799, including firm-paid benefits – putting him near the top of big bank CEO pay.

In comparison, Citigroup CEO Mike Corbat, whose pay of $17.8m last year was 369 times the median worker, and Dimon’s protégé Charlie Scharf, Bank of New York Mellon’s newish CEO, is on a $20m pay package, 354 times the average worker, according to Autonomous Research. It is unclear how much Corbat’s and Scharf’s security detail costs, but they were likely less expensive than Dimon’s, especially since he became an adviser to President Trump.

Dimon now owns 9.76m J.P. Morgan Chase shares – a stake worth more than $1.1bn at today’s prices.

Meanwhile:

UBS CEO Sergio Ermotti, who brought home $14.9m last year, says “there has been a very euphoric start of the year” but added that the rest of 2018 will likely be calmer – and thus less profitable for banks’ trading divisions. (Financial News)

Here’s who secured Wall Street bragging rights in every key banking business in 2017. (Business Insider)

Morgan Stanley plans to add 80 jobs in Paris after Brexit and transfer 200 London-based bankers to its Frankfurt hub. (Reuters)

Just a month after Deutsche Bank announced job cuts, the German bank promoted more than 10 London bankers and traders to MD. (Financial News)

A top British bank executive called one of the City watchdog’s regulatory officials a “little lady” during a recent visit. (The Telegraph)

Former Isda chair Keith Bailey left Barclays at the end of January. (Risk.net)

Bank of America Merrill Lynch, Citigroup and Morgan Stanley investment bankers are helping a client cash in on one of the greatest venture-capital investments ever. (Bloomberg)

The hedge fund LMR Partners hired J.P. Morgan and Goldman traders as PMs. (HFMWeek)

Citigroup became the first Wall Street bank to create gun-control policies after the massacre in Parkland, Fla. (New York Times)

A Comcast-Blackstone-Bain-led group bought the Weather Channel in 2008 for about $3.5bn and just sold it to a comedian for $300m. (Bloomberg)

Europe’s new data protection regulation presents unique challenges for blockchain businesses. (Bloomberg)

A looming regulatory rebuke for one of the world’s largest cryptocurrency exchanges is giving Bitcoin investors the jitters. (Bloomberg)

Why haven’t more Silicon Valley firms moved to Texas yet? The latter has a low cost of living and a rich tech history, but it lacks California’s startup culture. (Bloomberg)

Mexico is an insider-trading paradise where no one worries about going to prison. (Bloomberg)
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““

Once upon a time, people used to talk about “bulge bracket investment banks,” a term that loosely meant top US banks like Goldman Sachs, Morgan Stanley J.P. Morgan and (then) Merrill Lynch. The bulge bracket passed with the 2008 financial crisis, and since then it’s become more common to talk in terms of banks that are tier one, tier two, or tier three – but which is which? Today’s release from research firm Coalition offers an insight. Things are not what they used to be.

The tier one global investment banks: J.P. Morgan, Goldman Sachs, Citi, Bank of America Merrill Lynch, Morgan Stanley (in that order)

If we take tier one investment banks to mean banks which are global leaders in most product categories (rather than just banks with a nebulous sense of prestige attached), there aren’t many of them. As the Coalition chart below shows, there’s only really one in fact: J.P. Morgan. J.P. Morgan ranks first or second globally across all product areas (credit and municipal finance excepted). As the regional charts at the bottom of the page show, J.P. Morgan is also strong across markets in the U.S., Europe and EMEA.

By comparison,  Goldman Sachs’ FICC business is weak globally (with the exception of G10 rates) and the bank still lacks much of a presence in Asia. Bank of America has gaps in fixed income and equities and is also weak in Asia. Morgan Stanley is globally strong in equities, commodities trading and ECM.

The tier two investment banks: Deutsche, Barclays, Credit Suisse, HSBC, UBS

If the tier one investment banks are all Americans, the charts above and below suggest the tier two investment banks are all Europeans – although HSBC’s business is strongest in Asia.

Deutsche Bank is still a strong global player. It’s second globally for credit and securitization trading and it’s third globally for credit trading. It ranks in the top four for G10 rates, emerging markets macro and prime services and it’s in the top nine for most other products. Where Deutsche isn’t strong is most of equities and most of IBD. It’s still weak in the U.S. and it’s not great in Asia Pacific. Deutsche’s power base is Europe.

By comparison, Barclays, UBS Credit Suisse lack top slots globally in any products, but broadly rank in the top four to six for most of them. HSBC ranks second globally for G10 FX and macro trading, and is predictably strong in Asia but lacks a real presence in the U.S.  Barclays’ investment bank is stronger in the U.S. than EMEA, but has withdrawn from Asia. Credit Suisse is now as strong as Barclays in the important U.S. market.

Beyond the first and second tiers things get more complicated. Just because a bank’s not top ranked globally, it doesn’t mean it’s not strong in its home market or a particular niche. BNP Paribas, for example, ranks outside the top 10 in the U.S, and APAC, but is comparatively strong in Europe. SocGen is a leading player in equity derivatives and futures and options trading, but is grounded in Europe and lacks a real presence elsewhere.

Using McKinsey’s categorization, it’s evident that many of the tier three banks occupy the category of, ‘regionally focused banks strong in some product areas.’ The same applies to Nomura in Asia and Wells Fargo and RBC in the Americas.

Changing tiers 

Coalition’s data is a snapshot in time. The tiers are – needless to say – evolving as banks change their strategies.

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““

Bonuses are paid, the snow has gone (at least in London) and hiring season is heating up. In the next few months, you may well find that someone new joins your team. And that person may well not be welcome.

During my career in banking, the new recruits I’ve come to dread most of all are those foisted upon the team by the manager. The manager’s, “secret hires.”

Obviously some degree of secrecy is necessary. If a bank is interviewing someone, it has to keep the process private. But the extent of this privacy depends on the team leader. Some managers will say nothing at all. Others are more open. some banks (Goldman) like to introduce the potential new hire to the team for feedback before making an offer. Others just pull the trigger on the new recruit without any consultation.

When the latter happens, it causes a huge amount of resentment. A particularly slimy former manager of mine hired a salesperson friend of his from another bank. A recruiter told me about the move and 15 minutes after the guy resigned I went up to my manager and said (sarcastically), “Nice work on the new hire.” He asked how I knew. I pointed out that I’m in sales: I know everything.

It was three months before the manager’s new hire actually arrived. During those months, the guy was relaxing on paid gardening leave; we were working hard and nurturing our resentment. The team had no need of the manager’s friend.  When he arrived, he was as bad as could be expected: arrogant as hell, shaking hands with everyone, floating around on a cloud of conceit.

He sat next to me and was given a green light from the manager to do whatever he wanted. This meant calling our existing accounts and talking about our services. I then received calls from my clients asking who this guy was and why he was calling given that I was already assigned to them. The whole thing was a mess. Some of my close clients politely told him to stick it. Some of my colleagues gave their clients a heads-up about this guy approaching them and asked them to give him the cold shoulder.

Ultimately, it became apparent that the manager’s pet hire had an agenda. This is often the case, and is something to watch out for. He’d joined us because he hadn’t been promoted at his previous bank and he wasn’t about to let that opportunity pass him by again. Not only, therefore, was he incredibly arrogant: he was incredibly aggressive. He was out there to win the best accounts and to show the rest of us up as inadequate. If anyone was going to make managing director in the next few years, he wanted it to be him. He was basically a nightmare colleague.

Eventually, things became unbearable. Clients were confused and complaining and we had no choice but to speak to the manager. We were promised change and accordingly the new guy softened his approach. Three years later, he still hasn’t been promoted. Nor, however, has he been accepted into our inner circle. He started as an outsider who was parachuted and he’s stayed that way. Let this be a message to all the managers who fancy hiring their friends.

Simone Bougie is the pseudonym of an equities salesperson in London 

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““

Today is the day of the Credit Suisse compensation report. Following closely on from the compensation reports of both UBS and Deutsche Bank, it offers a helpful window into comparative pay at the Swiss bank. Despite the Dartmouth Partners bonus survey, which suggested that junior Credit Suisse investment bankers didn’t do too badly, today’s report suggests Credit Suisse’s senior managers and top traders are, on average, paid less than some rivals.

The chart below pertains only to compensation for “material risk takers”. At Credit Suisse, there were 1,070 material risk takers in 2017 and they were defined as members of the executive board, people reporting to members of the executive board, as anyone taking “material risks” on behalf of the group, as anyone whose role has been defined by regulators as having a potential impact on group risk, and as the bank’s 150 highest paid employees.

In 2017, the average material risk taker at the Credit Suisse Group received a salary of CHF556k ($583k) and a bonus of CHF900k ($949k). While this made for total compensation that was a hefty 42% higher than at Barclays International (Barclays’ investment bank), CS paid a lot less than UBS and a lot less than Deutsche’s corporate and investment bank (CIB).

In the chart below, Deutsche’s pay figures are flattered by the fact that they refer to the CIB alone. UBS’s figures are for the bank as a whole. However, UBS only had 707 material risk takers to Credit Suisse’s 1,070 in 2017, suggesting that CS cast its net wider, and drew in a higher number of lesser paid employees who may have brought the average down.

This might be why Credit Suisse seems untroubled by its comparative pay figures and says in its compensation report that it won’t be hiking salaries this year. Notably, both Credit Suisse and UBS are far more generous with cash bonuses than Deutsche Bank: at DB anyone earning over €500k in total compensation has the entirety of their bonus deferred; at CS and UBS 100% deferrals only apply to employees earning over $2m.

For all the restructuring that’s already happened at Credit Suisse’s global markets and investment banking and capital markets business, today’s report also suggests there’s plenty more to come. The Swiss bank’s executive board are partly compensated on the basis of the bank’s adjusted return on regulatory capital. For 2017 this was 4.3% in global markets and 15% in IBCM. Credit Suisse doesn’t divulge its targeted rate of return by business, but in both cases senior managers were paid well below both their target and the lower performance threshold. The restructuring is not over yet.

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““

At the time I applied to Accenture, my knowledge of management consulting had some gaps, but what I did know encouraged me that the opportunity was a great fit.

The management consulting recruitment process is rigorous. I submitted a resume and transcript online, had a one-hour phone interview with a senior manager, then a final-round in-person interview with behavioral and case-study components, and then received my offer.

Here are my tips for successfully going through the management consulting interview process:

Use interviews for self-reflection

The life of a consultant isn’t for everybody. Take the time to think if consulting is right for you, just as much as you take the time to prepare for your interviews.

Unlike many interviews where you’re asked about your experience and skillset, my consulting interviews questioned me more around my preparedness and desire to constantly travel for the job and take on client-facing work that could require long hours. Think about this in advance.

Once you reach the interview stages, odds are you have the aptitude for the role; it’s now about assessing your stamina and readiness for the lifestyle that comes with it management consulting.

Trust the process, but don’t rely on it

The major management consulting firms are recruiting powerhouses, so once you start interviewing you won’t fall through the cracks. However, that doesn’t mean you won’t make mistakes and you need to be one step ahead of the curve in case they do happen.

For example, my recruiter emailed me information for a webinar to help me prepare for my case-study interview. However, he sent the email after the webinar had already happened! I avoided panic because I had started prepping well before the last-minute email. I may or may not have gone down a long, dark hole of mock case videos on YouTube.

Focus on internal networking once you get the job

Even when you’re hired as a consultant, you’re not automatically guaranteed consulting work, that is, staffing on a project. Honestly, my knowledge of managing consulting was maybe a five on a 10-point scale before getting hired, so this was something I learned after the fact. It’s also one of the distinguishing factors of consulting life.

Your role is basically split between “off” and “on the bench” hours – whether you’re actively on a client project or looking to get staffed on the next. Getting assigned to a project, and being a successful consultant in general, involves networking. This is especially key as a new joiner without previous projects to speak to.

Even before day one, I was messaging and hopping on calls with current consultants who spoke with me about their experiences and always offered to connect me with people who may need an entry-level analyst on their team. I see this all boiling down to talking to as many people as possible and having patience.

Don’t be afraid to ask for a later start date

With a lot of planning and a little luck, I arranged a position almost two full months before starting. My company was even generous enough to offer me a selection of three different months to start.

I used that time to exercise and focus on my health, spend time with friends and family, and launch a website I had been working on for a long time. While I know such an extensive period of time before starting your new job might not be attainable for everyone, it can be really valuable if you can squeeze in even a couple weeks to travel, take on a personal project and make sure you’re clear-headed before jumping into the world of management consulting.

Sara Leeds is an incoming management consulting analyst in the Consulting Development Program (CDP) at Accenture and the founder of Profesh, a website providing job search strategies and career advice for students and young professionals.

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How much did investment banks in London pay their vice presidents (VPs) in salaries and bonuses for 2017/2018? A new compensation survey from London-based recruitment firm Arkesden Partners suggests a remarkable degree of similarity once you hit senior VP level, but a far tighter spread below that.

As the chart below based upon Arkesden’s data shows, total compensation for first year VPs in London investment banks right now ranges from £239k (UBS) to £271k at Bank of America. For second year VPs it ranges from £276k (Deutsche) to £294k (Bank of America). And for third years it goes from £307k (Barclays) to £334k (Goldman Sachs).

In other words, you can earn nearly 11% more at BofA than at UBS as a first year VP, but by the time you hit your third year the differential between the best and worst paying banks has narrowed to 900 basis points.

Most banks split VP compensation almost equally between salary and bonus. However, there are outliers. Morgan Stanley, for example, pays unusually high salaries of £170k to VPs at all levels, but makes up for this by reducing bonuses in the first and second years. Deutsche Bank always errs on the side of higher salaries and smaller bonuses and Bank of America pays its VPs steady salaries of £150k at every level, but increases bonuses more dramatically as its bankers progress.

As the final chart below shows, most London VPs should be pretty happy with their lot this year: total compensation has generally increased. Higher pay is particularly in evidence at Deutsche Bank after the restoration of bonuses. However, several banks have substantially increased pay for first year VPs (UBS, Barclays, Goldman Sachs), while BAML, Morgan Stanley and Credit Suisse have given third years double digit percentage rises. No VPs received pay cuts – or if they did, they weren’t reflected in Arkesden’s averages.

(Hover over charts to see figures)

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““

The Financial Conduct Authority’s investigation into claims of Jes Staley’s inappropriate treatment of a “whistleblower” continues to drag on without a conclusion in sight. But anonymous insiders told the Sunday Times that there is more than one side to every story, arguing that it’s important to give a fair chance to people with previous issues related to addiction or mental health.

To rewind to what caused the regulatory scrutiny in the first place, Staley allegedly told his security department to discover the identity of an individual who wrote to the board raising concerns about a new employee despite having been warned against this. The Times reported that he even asked the U.S. postal service to identify from where the letter detailing the claims had been sent.

That is a no-no, especially for a CEO. However, the truth is more complicated and some say that there are mitigating circumstances.

First, the “whistleblower” was not a Barclays employee, but rather someone who sent an anonymous letter claiming to be a former colleague of the banker in question, according to The Times.

The core claim was that Staley’s new hire had problems with alcohol. Staley knew all about this – years earlier he had helped said banker to deal with his issues with booze while they were colleagues at J.P. Morgan Chase – so he was dismissive of the letter. The individual went through rehab and later left to join a rival bank, where he worked for several years before Staley asked him to join Barclays in 2016.

The article says: “Before agreeing to join, the banker disclosed everything about his past issues to Barclays. The fact that he and Staley were friends was also declared. Therefore, nobody at Barclays saw anything in the letter worth noting.

“Staley reacted angrily, as he saw the letter as vindictive. Knowing the circumstances, the board had some sympathy – which is why they settled for slapping their chief executive on the wrists and docking his bonus.” While it remains deeply inappropriate for a CEO to pursue a whistleblower, the Sunday Times’ detail personalizes Staley’s case and helps explain his motivation.

That’s not the bank’s only headache. In addition, Barclays has drawn up contingency plans as it awaits the next move of activist private equity investor Edward Bramson, who’s built a 5% stake in the firm.

Separately, when it comes to recruiting college students, Goldman Sachs is casting a wider net, at least according to its 2017 shareholder letter:

“Our recruiting strategy is centered on expanding and diversifying our applicant pool. Through the use of technology, including video interviewing and hosting online coding challenges, we increased the number of schools from which we interview intern candidates by more than 150 schools for the 2018 class, compared to 2017.”

That doesn’t mean Goldman has started accepting sub-3.0 GPAs from any old university, but it does mean that you have a fighting chance to get a job there even if you didn’t go to an Ivy League school, MIT, NYU-Stern or Oxbridge.

In addition, the letter revealed that Goldman is aiming to add 1k companies to the roster of clients covered by its investment bankers over the next year and a half.

Further, Goldman revealed that it paid its European CEO, Richard Gnodde, $19m last year.

It is also trying to expand the audience of its “Talks at GS” interviews, a series of chats with guests ranging from corporate chieftains like Bob Iger of the Walt Disney Co. to athletes like Magic Johnson and artists like the novelist André Aciman, who wrote “Call Me By Your Name.”

Meanwhile:

Credit Suisse CEO Tidjane Thiam received $10.2m in 2017. (WSJ)

J.P. Morgan pays men at its investment bank in London more than twice as much as their female colleagues, undermining the Wall Street giant’s recent claim that it has a minimal gender pay gap. (The Times of London)

A state with an ex-Goldman governor across the river from Wall Street is voting on legislation to strengthen pay-equity today. (WSJ)

Nasdaq C.E.O. Adena Friedman grew up hanging around the trading floor with her father. How is she now running a major stock exchange? She spoke up, and she got stuff done. (New York Times)

Wells Fargo is making more changes to its risk management across the bank, just weeks after it was slapped with an enforcement action from the Federal Reserve. (WSJ)

While former Federal Reserve Chair Janet Yellen broke new ground as the first female holder of that post, women holding management positions are still a rare breed at some major central banks. (Bloomberg)

Neel Kashkari helped bail out big banks during the financial crisis, but now as a Federal Reserve regional bank president, he is proposing measures that could break them up. (WSJ)

The CFTC commissioner Rostin Behnam has slammed an “unimaginable” cut to the derivatives regulator’s funding. (CTA Intelligence)

The City of London is still planning for a messy “cliff-edge” Brexit. (FT)

More hedge funds closed their doors than opened up in 2017, but the pace of liquidations slowed as the industry attracted fresh cash. (Reuters)

IHS Markit CEO Lance Uggla says “there’s a good chance” that blockchain “will be adopted in many marketplaces for many asset classes in the future.” (Business Insider)

Here’s what you need to know about quantum computer systems. (The Next Web)

Wall Street and Silicon Valley both rejoiced as shares of the file-sharing company jumped 36% on their first day of trading Friday. (New York Times)

Might Wall Street firms be able to take advantage of Facebook’s struggles to attract top tech talent? (New York Times)

When it comes to dishonesty, there are three kinds of people. (MIT Technology Review)

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““

Credit Suisse has taken an axe to its U.S. prime brokerage business. Two weeks after we predicted a round of redundancies following the departure of global head of prime brokerage, Indrajit Bardhan, around 20 people in the front office have disappeared, many of them very senior.

The exits include the following names:

Jeremy Siegel: Managing director and global head of the consulting team.

Bob Leonard: Managing director and global head of capital services.

Clay Mason: Junior on capital introduction team.

Mike Wingertzahn: Managing director and head of Delta 1 sales.

Gardy Berthoumiex: Managing director and global head of the central collateral desk.

Isabelle Krusen: Director, prime services coverage.

Julia Allen: Director, prime services coverage. Chicago

Stephen Webb: Vice president, U.S. equity finance trading.

Mark Matulonis: Vice president, prime brokerage transition management.

Fred Nadd-Aubert: Managing director and head of securities lending.

Tony Palladino:  Director, securities lending.

Shelby Tom: Trading assistant, securities lending.

Phil Maxim: Vice president and delta one trader.

Jeffrey Janker: Director, advanced execution services and trading coverage.

Credit Suisse confirmed the departures. Many of the names on the list above were senior staff with long tenure at the bank: Siegel had been at CS for 13 years, Leonard for 15 and Berthoumiex for 20. Most were based in New York. Credit Suisse’s prime broking business employs “hundreds” of people in total.

The layoffs come as Credit Suisse continues to take costs out of its global markets business. The Swiss bank hired heavily for its equities business in 2017, but revenues fell 8% last year, partly as a result of the reclassification of systematic equities as part of wealth management division, but also because of what the bank itself described as, “market challenges.”

A spokeswoman for Credit Suisse said: “We continue to invest in the equities business and across the global markets division as evidenced by our recent hires. Credit Suisse remains committed to its Prime Services business as the cornerstone to its Equities department.”

Credit Suisse’s approach to its prime brokerage business has been confused in recent years. In late 2014, the bank indicated that it was planning to shrink the business because of its heavy use of balance sheet, and in late 2015 some London prime brokerage trading roles were shifted to Dublin and the bank reportedly notified clients that it was closing its FX prime broking business. By March 2016, however, Credit Suisse changed its mind and said it had decided to maintain and invest in prime brokerage, seemingly as a means of winning hedge fund clients.

The latest prime brokerage cuts suggest that Credit Suisse is trimming pb again. Last week’s compensation report indicated that members of the bank’s executive board had their 2017 bonuses curtailed for failing to generate returns. The 4.7% 2017 return on regulatory capital in global markets was below the bank’s unspecified lower “threshold.” Cutting back on capital hungry prime brokerage activities looks like one way of remedying this. However the bank says that headcount cuts will not be matched a reduction in capital allocated to the business.

Credit Suisse has the third largest prime broking business globally. Last year, however, Credit Suisse’s prime broking business slipped to fourth place in the U.S. market according to HFM Magazine, which said the bank was being used as a “back-up” by many of its clients.

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““

Barclays has got itself a senior technologist as it looks to reinvigorate its equities business.

Eric Anderson, the former global head of equities and prime technology at Nomura Securities, joined the British bank as a managing director in its New York office earlier this month. Anderson has over 18 years of experience and specializes in algorithmic trading, equities execution, low latency applications, and derivatives.

Anderson’s arrival comes as Barclays invests in both cash equities and technology.  In July 2017, Barclays hired KCG’s former head of European electronic trading and in February 2018 it recruited Naseer Al-Khudairi from Credit Suisse as head of global electronic equities.  CEO Jes Stanley says the bank has under-invested in technology and has promised to make amends.

Last year, Barclays hired no fewer than 40 managing directors for its investment bank last year. This is Anderson’s second stint there. Almost a decade ago, he served as a director of global futures execution IT at Barclays Capital for less than a year. He shifted to Nomura in 2009.

Separately, UBS has also made a significant tech hire. The Swiss bank brought onboard Jennifer Tosi, a  technology veteran with 25 years’ experience to work on the automation of research.

Tosi joins as an executive director to head automated intelligence and research technology. Before joining UBS, Tosi was the executive director of information technology at Morgan Stanley for almost eight years. Her earlier stints include working at Deutsche, McKinsey & Company, and IBM.

In January CEO Sergio Ermotti said UBS plans to invest in content and distribution suggesting it’s doubling down on MiFID II by focusing on research.

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““

A German banker, a French banker and an American banker are working together at 3am.

‘Where is my desk’, says the German banker, taking out his GPS amidst the closely huddled furniture covered with disintegrating pitch books, mouldy towels and swearing, sleep-deprived bankers. And where are my legal working hours, he asks, but silently, because he has to start a new presentation at 10pm for Sunday morning. The British banker is well ahead of him and has already signed all his rights away.

‘Where is the kitchen’, says the French banker, looking in shock at the dirt encrusted microwave and rarely-cleaned coffee machine in the tiny hovel shared by 500 people on a work floor. He touches nothing without his handkerchief. The British banker is well ahead of him, drinking milk directly from a shared bottle and wiping his saliva over the screw top.

‘Ah, here’s the boss’, says the American banker and runs after him to call him, “Sir,” laugh at his jokes, carry his workload and lick his boots while waiting for a chance to stab him in the back and take his job. The British banker tries to compete using weaponised upper class attitudes honed through the generations, but he just doesn’t speak the same language as the American and his boss.

When I worked in banking, I would meet at least 20 different nationalities on any given working night. Many bankers worked in so-called ‘country groups’ and they all spoke excellent but very different versions of English.

French bankers often worried about putting on weight as a result of British canteen cooking. They wrote convoluted texts crammed with footnotes and expected to succeed through merit.  In the graphics centre, French bankers often made fulsome compliments to the ladies in a special, ‘romantic’ voice which flipped into insults the moment we didn’t smile and comply.  ‘Can you please do me a special favour’ they would say, expecting to jump queues and get preferential treatment based on their ‘charm’.

German bankers were universally polite. They seemed to think that people were equal, including women. They eagerly offered their opinions, often enthusiastically disagreeing with their bosses whose titles they forgot (a really bad cultural fit at the bank I worked for). They always took away their own rubbish. In the highly charged, combative atmosphere of the bank this created nothing but the deepest suspicion.

The American bankers were by far the most aggressive. They felt truly entitled to mistreat those lower down in the hierarchy (like me) because, to them, we were worthless losers who deserved our fate. The Americans mostly focused on sucking up to the boss, staying awake for two years flat and taking credit for everyone else’s work while bragging about coming from the ‘Land of the Free’ and equal opportunity.  They were also the most successful at the Most Successful Bank in the Universe, returning triumphantly to New York when their duty abroad was done.

Nyla Nox worked for seven years on the graveyard shift in the graphics department of the Most Successful Bank in the Universe in London – a Global Center of Excellence. She has seen more dealbooks (and mistakes) than any banker will see in a life time. Her novel ‘I did it for the money’, first volume in ‘The Graveyards of the Banks’ is available on Amazon.

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““

Just because you’re a data scientist, don’t presume you’ll get hired by an investment bank.

This is the message from Shary Mudassir, a managing director in global equities trading at RBC Capital Markets. “It’s hard to attract and retain highly capable AI talent – if you get 100 applicants, then 90 of them are not really data scientists, and if you get 10 average data scientists, they won’t be as effective as one really good data scientist,” Mudassir says. “The 99th-percentile [employee] will add 80% of the value for the entire team.”

He should know. Mudassir is tasked with building out an artificial intelligence lab for RBC Capital Markets in Toronto, opening in May. It will be in addition to the Borealis AI lab, which the bank’s opening in Montreal to join existing Borealis labs in Toronto and Edmonton.

RBC is betting that the data science, artificial intelligence and machine learning laboratory will give it a leg up in trading – and in attracting the best STEM talent. “The Global Markets AI Lab is a special space we’re setting up on the trading floor in Toronto, with more than 400 traders across asset classes, including FX and commodities,” says Mudassir.

“We’re the first bank in Canada to create an AI lab on a trading desk, with scientists and engineers solving trading problems using AI in their toolkit,” he claims.

The plan is to bring in experience algorithmic traders, as well as business and domain knowledge experts, to present how they do business and trade and think of new ways of solving their existing problems with AI and machine learning. RBC will then turn them into commercialized products.

RBC executives believe that having an AI lab integrated with its trading unit will help the bank to attract the best talent. This is where the challenge begins.  “I’m always about organic growth, hiring the right people rather than hiring quickly,” Mudassir says. “With this lab in place, we’ll likely have to find senior resources to manage people in the lab, and as my mandate gets bigger, I will need help to run this lab as well.”

Many data scientists and artificial intelligence professionals have cut their teeth in a research environment, but Mudassir suggests this isn’t the kind of experience he’s looking for.  “We’re not an R&D shop – everything we do becomes part of a large operational system,” he tells us. “You have to live and die by your work, but this is getting applied to trading strategies, applying cutting-edge AI innovations to real-world problems specifically on the trading side.

“The juniors we hire are very much driven by seeing their work play out in the real world, not just to do research, but also to enhance the field of AI,” he says.

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““

Sam Wisnia is leaving Deutsche Bank

Sources say Wisnia resigned this morning. Deutsche Bank declined to comment. Wisnia is off to join Eisler Capital, the $2.6bn macro hedge fund set up by former Goldman Sachs partner turned philanthropist Edward Eisler in late 2015. Wisnia worked with Eisler at Goldman Sachs and the two men set up DMC Partners, an emerging markets fund, after leaving Goldman.

Wisnia joined DB from Goldman Sachs in 2014 . He was head of macro trading at DB and a member of the executive committee for the corporate and investment bank in Europe. Under his leadership, Deutsche built a large “strats” and risk pricing business along the lines of Goldman Sachs’ strats group.  Wisnia was the former global co-head of strats at Goldman.

Wisnia’s exit leaves a big hole in Deutsche Bank’s sales and trading business, which had a challenging 2017. Deutsche CFO James von Moltke said last week that the investment bank is also having a difficult first quarter and DB is contemplating more “radical” action if necessary. Nonetheless, Deutsche has been hiring heavily from Goldman Sachs’ macro structuring team in recent months, with many of the hires thought to have been driven by Wisnia himself.

Wisnia, who graduated from France’s Ecole Polytechnique in 1998, has a reputation as a charismatic if prickly character who doesn’t suffer fools gladly. A skilled risk taker and brilliant quant, his exit might be perceived as the reassertion of Deutsche’s old guard. “A lot of the younger generation at Deutsche are going to really miss him,” says one headhunter, speaking off the record.

Wisnia has a reputation for treating those in his inner circle lavishly. In 2016 he flew members of his team to Washington on a private jet he rented himself. At the time, Deutsche was cutting costs and CEO John Cryan was making a point of flying commercial.

One former colleague described Wisnia as, “a brilliant and fascinating character but a bad manager”. “He sees everything in black and white and has no take on shades of grey. He told a senior person in a management meeting that he was a donkey, and then followed that with, ‘to call you a donkey is an insult to the donkey’”, he claims.

Others who know Wisnia say he’s “incredibly bright and talented, but also incredibly arrogant” and that “he’s popular on the desk because he gets things done but if you don’t get on with him, you’re out…”

One headhunter who knows Wisnia agrees: “He’s a doer, and if you’re a doer too you’ll get on,” he says. As Deutsche tries to reinvigorate its investment bank, Wisnia’s ability could be sorely missed.

Deutsche insiders say no reason was given for Wisnia’s departure. “People just received an email saying he’s going,” says one.

Eisler Capital has 45 employees in London and has achieved annualised returns of 7.25% since inception. Wisnia’s decision to quit banking for a macro hedge fund may encourage other risk takers at Deutsche to do the same.

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““

The average compensation – salary including bonuses – in New York City’s securities industry was $375k in 2016 – five times higher than the $75k average for the rest of the private sector. However, less than one-quarter – 23% – of the industry’s employees in the city earned more than $250k, according to New York State Comptroller Thomas DiNapoli’s just-released report.

Granted, only 2% of New Yorkers across the rest of the city’s workforce earned at least that much. Still, the fact that more than three-quarters of all Wall Street employers make less than that is an indication that a select few mega-earners are pulling up the average significantly while the median all-in compensation total is much lower.

For reference, Goldman Sachs Chairman/CEO Lloyd Blankfein’s pay last year was $24m and J.P. Morgan Chase chairman/CEO Jamie Dimon’s total 2017 compensation was $28.3m. Meanwhile, Mike Corbat, the CEO of Citi and Brian Moynihan, the CEO Bank of America Merrill Lynch, both got $23m and James Gorman, the CEO of Morgan Stanley, took home $27m. The comp for those five men alone skews the average noticeably.

In addition, after adding jobs for three consecutive years, Wall Street employment was basically flat year-over-year, dipping slightly in 2017 to 176,900 jobs. Despite gains from 2014 to 2016, New York City securities industry employment is still 6% smaller than before the pre-crisis peak in 2007, while the rest of the private sector has grown by 23%, according to the comptroller.

On the bright side, DiNapoli’s report found that securities industry profits rose in 2017 for the second year in a row – they jumped up 42% last year, totaling $24.5bn, after growing by 21% in 2016. Also, the average bonus paid to industry employees in New York City increased 17% to reach $184,220. To reiterate, though: Average figures can be deceiving.

Source: Office of the New York State Comptroller Thomas DiNapoli

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Kim Hammonds had a long career working in technology for corporates before becoming chief operating officer at Deutsche Bank in 2015. She was, for example, chief information officer at Boeing, where she was responsible for , ‘IT strategy, systems, infrastructure, architecture, processes and people.’ She was director of Americas manufacturing operations at Dell, where she was responsible for global systems development for service logistics, supply chain and quality systems. And she spent 16 years working for Ford as director of Manufacturing Systems for North America, supporting 48 plants, manufacturing engineering, supply chain and production systems.

Now, however, Hammonds is applying her technology experience at Deutsche Bank. And it’s not easy. Hammonds is said to have told attendees at a recent senior management conference that Deutsche Bank is the the “most dysfunctional” place she’s ever worked, that it’s “vastly more complex,” than any of her previous employers and is in the middle of a, “difficult transformation.”

Hammond has since back-pedaled slightly on her comments, telling Handelsblatt that they were made at an “internal, confidential management conference.” However, she has not denied them. They come as she attempts to get Deutsche’s sprawling IT infrastructure under control by reducing its multifarious computer systems down to four (so far she’s on around 34) from over 40.

Every bank is not a Deutsche Bank, but most banks have similar problems with unwieldy IT. Hammonds’ problem is made worse by the other banking bugbear: politics. Finews notes that veteran Deutsche Bankers don’t much like the straight-talking American woman and have urged her to stand down. Her contract is up for renewal soon. Other senior technologists wondering whether to move into banking might look on askance.

Separately, it’s not easy being a Goldman Sachs banker in a distant outpost. Take Goldman Sachs partner David Dase, who’s transplanted himself and his family to Atlanta after spending his career in New York and San Francisco.

As Dace tries to set up Goldman’s Atlanta office and win local clients as part of Goldman’s drive to penetrate the mid-market, he’s having to press the flesh in a serious way. “He’s out and about — he attends everything. He has just really gone all-in to get to know people in the community,” says a leader of the local business chamber. Among other things, it seems Dase has been seen at a seminar on artificial intelligence and cryptocurrencies with other area executives, hanging out at a barbecue, and attending the opening of a new play. This is in addition to the day job. Don’t presume that winning over the mid-market takes a middling amount of effort.

Meanwhile:

Former Goldman employee alleges she was sexually assaulted by a group of drunk male colleagues from the U.S. banking giant’s currency trading division at a dinner for brokers in London in 1994. (Financial News) 

“I was the 0.01% of females trading currency.  I was earning 0.025% of my male colleagues’ salary. No, that is not a typo!  My male colleagues would humiliate me daily, for example I was bitten and my name was either slut, mammary or dusty bin.” (SUTGS1)

Harry Keogh, a senior Coutts banker who was disciplined for harassing female colleagues, has left the bank. (Financial Times)  

J.P. Morgan is providing Amazon’s Alexa to its institutional clients so that they can ask for stock prices. (Bloomberg)

Balyasny, the hedge fund which loves hiring junior bankers. is cutting staff. (Reuters) 

UBS Wealth Management hired five Mexico-focused, ultra-high-net worth advisors from JP Morgan. At JPM they managed a total of $30bn in client assets. (CityWire) 

The CFA surveyed its members about their attitudes to Brexit. Just 7% thought it would be a good thing for the City of London. (Bloomberg) 

The former ex-Japan investment banking chairman at Nomura says he was fired for no good reason. (Bloomberg) 

Gender neutral Google toilets. (Financial News)

French waiter fired in Canada for being aggressive rude and disrespectful is suing on the grounds that he was just being French. (Guardian) 

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

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Deutsche Bank will miss John Cryan. Yes, its share price has fallen 57% during his reign. Yes, there are still costs to be taken out. But Cryan is a steady pair of hands. He’s “outstanding” according to the sources who seemingly told the Times that DB is looking for his replacement. There’s “no one as good as John,” internally those sources added.

Why, then, is DB said to be looking for an alternative to Cryan when his contract ends in 2020?

Politics looks like one answer. The Times says Cryan’s fallen out with Paul Achleitner, the chairman of Deutsche’s supervisory board who previously managed the German subsidiary of Goldman Sachs. Together with James von Moltke, the CFO hired-in from Citi in April 2017, the seemingly mild-mannered and “infallibly cheerful” Cryan is said to want to seriously restructure the investment bank.  Von Moltke too wants a “complete overhaul” of the corporate and investment bank (CIB) after declaring publicly last week that DB is contemplating more “radical” action after a difficult first quarter and thereby effecting a 7% fall in the share price. Von Moltke said in February that Deutsche plans to get “very aggressive” on expense management in 2018.

Deutsche Bank isn’t commenting on the veracity of the Times’ report, but the danger  is that Cryan will be a lame duck CEO for the next 21 months – unless he’s paid to disappear quietly.

In the meantime, Cryan isn’t the only senior Deutsche executive leaving. As we reported yesterday, Sam Wisnia head of macro trading and analytics and a member of the executive committee for the corporate and investment bank in Europe has unexpectedly left for a hedge fund. Wisnia built a large “strats” team at DB, the future for which suddenly looks unclear. It’s also starting to look like chief operating officer and head of IT Kim Hammonds will leave when her contract expires. If all three go, it will be the end of an era.

In the meantime, Deutsche’s alleged attempts to replace Cryan have a strange whiff of desperation. The bank is said to have contemplated hiring Jean Pierre Mustier, chief executive of Unicredit, or Bill Winters, chief executive of Standard Chartered. It’s also said to have asked Richard Gnodde, who’s currently paid $19m a year to run Goldman Sachs’ European business and who has said no.

Cryan was paid €3.6m to run Deutsche Bank in 2017: he’s not just good, he’s cheap. What more could a bank with cost issues want?

And if Deutsche can’t persuade an outsider to come in and run it for peanuts? Despite the protestations that no one else at DB right now is as good as Cryan is, there’s always Marcus Schenck, the ex-Goldman Sachs banker who was Deutsche’s CFO before Von Moltke and who now runs the corporate and investment bank. Schenck is reportedly seen as a strong candidate. He’s German. He knows the investment bank. Schenck is also from Goldman Sachs and his ascension would cement Deutsche’s transformation into a place run by ex-Goldmanites.

Would Schenck be enough to save Deutsche? More importantly, would he be able to turnaround the investment bank without radical action? It may be a while before we find out. For the moment, Cryan still has plenty of fans. “John is great,” says one MD. “It’s not even worth discussing this nonsense.” Another senior Deutche Banker suggests Cryan is more popular internally than some other CEOs: “Many people are really annoyed about the lack of tangible progress, the terrible stock price and lack of clear vision, but it wouldn’t be cut and dried if he went – a lot more people would be happy if Thiam left Credit Suisse.”

What is happening at Deutsche Bank? Today’s Times story suggests that not only has John Cryan lost the confidence of the board, but that the board has is busy selectingpotential candidates to replace him, one of which (Richard Gnodde of Goldman Sachs) has already turned the job down.  This is not an ideal situation.  What’s going on?

There are several reasons why bank CEOs get sacked.  First, there is a general presumption that each CEO only gets to do one major equity issue. John Cryan has already played his card here, with the €8bn capital raising completed in April 2017.  Because of this capital raise Deutsche currently has a Common Equity Tier One ratio of 14%, versus a regulatory requirement of 10.65%.  This leaves the bank with plenty of headroom for organic business growth, but probably not in a position where it could really take part in any round of consolidation in European banking.  It maybe that the board think that more capital is needed, and that although Cryan has done a good job in taking Deutsche past its near-death experiences in 2016, a new face is needed to deal with the challenges of returning to growth. It may even be the board wants to be more aggressive in rebuilding Deutsche’s franchise in the USA.

That’s one possibility.  Another way that CEOs get fired, though, is when the board no longer believes in their strategy.  The most seismic thing that Deutsche could do would be to turn away from investment banking and concentrate on its franchises in payment services, German retail banking and corporate lending, with very large associated job losses.  If you work in Deutsche’s corporate and investment bank, this will be your fear.

This also seems unlikely, though.  Deutsche’s CIB division is more than half the bank by earnings, and although it earned roughly the same rate of return as the other divisions in 2017 (1.4% RoE versus 2% for the Private and Commercial Bank), it could at least be argued that CIB’s problems are cyclical.  The PCB returns have been low for as long as anyone can remember, and are linked to the fact that Germany is a structurally over-banked market, where pricing is set by state-owned and mutual competitors.

Added to this, the names that have been attached to the job would not suggest a major strategic shift. – Gnodde is a pure investment banker, and while Jean-Pierre Mustier currently heads Unicredit, his background is also in investment banking, as is Bill Winters’.  So although some parts of the Deutsche empire – particularly the remaining U.S. businesses, which really look like they need to be either further invested in or shut down – might be early losers from a new CEO, radical change affecting the core trading operations looks unlikely.

Perhaps most plausible, though, is the most depressing alternative for shareholders, and for employees.  Sometimes, CEOs get fired simply because of “sick building syndrome” – a management culture that is inimical to long term planning.  Deutsche has lost plenty of senior management over the last ten years, and Cryan’s disagreements with Paul Achleitner over the relationship with HNA, the largest shareholder, have been public knowledge.  You can generally afford to have a fight with your chairman, or your investors, but not both at once.  If Cryan is under fire simply because he has got on the wrong side of the supervisory board, that might make it very difficult to hire the right candidate to replace him.  The biggest risk right now for Deutsche employees is that of an Anthony Jenkins figure – a compromise candidate promoted into the top job simply because he has not been associated with any of the past problems, who ends up making quite destructive changes to the business simply out of a need to be seen to do something.

Dan Davies, is a senior research advisor at Frontline Analysts and a former banking analyst at Cazenove, Credit Suisse and BNP Paribas.

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