The world's largest investment banks suffered through a disappointing first half of 2012, driven by lower trading volumes, a lull in deal-making and a vulnerable cash equities business, according to a new study.
Revenue increased in only three of the 13 largest business lines at the world's top investment banks during the first half of the year, according to Financial News, citing a Coalition study. The other 10 business lines fell short of expectations, contributing to a 7.5% industry-wide dip in revenue, from $93 billion to $86 billion.
The cash equities business was one of the biggest disappointments, with revenue falling 25% from a year ago, leading bankers and headhunters to question whether further job cuts are looming for the second half of the year, according to Reuters. Stock trading and advisory units also appear vulnerable to cuts.
Large investment banks have already shed nearly 6% of their staff over the past year, cutting head count by roughly 10,000 from June 2011 through June 2012. Goldman Sachs has been the most active, slicing head count by nearly 10%.
ResCap Probe (Reuters)
Residential Capital, the mortgage unit of Ally Financial, is being investigated by the Securities and Exchange Commission for possible mortgage fraud. The probe got underway in February but was first disclosed late Monday.
Board Members Knighted (Reuters)
Knight Capital, which recently lost $440 million due to an embarrassing computer-trading glitch, added three new board members this week, including directors at Blackstone Group and General Atlantic, firms that gave Knight a financial lifeline after the trading debacle.
Greek Fallout (WSJ)
Credit Agricole appears on the verge of exiting Greece, ending a disastrous six-year run as the owner of the Emporiki Bank. The French firm said that it is currently reviewing three bids for Emporiki.
Reaching Out (Financial News)
China's new regulation allowing insurers to work with third-party fund managers may soon lead to a new partnership. Ping An Insurance has sent out requests for proposals to external firms in an effort to diversify its investments.
Come on Down (DJ Newswire)
Boutique investment bank Gleacher has appointed Citigroup alum Randolph Barker its new head of investment banking and capital markets. Barker is replacing Jeffrey Tepper, who is leaving Gleacher for undisclosed reasons.
A Mighty Haul (Financial News)
ED&F Man has poached three foreign exchange traders from competitor Marex, all of whom happened to have worked for MF Global before it collapsed. The threesome jumped ship back in June.
Costly Mistake (Des Moines Register)
A Wells Fargo Home Mortgage employee was let go last month after the firm became aware that he used a fake dime to operate a washing machine…in 1963.
Buzz Around the Office
The Donald Speaks (TMZ)
Donald Trump has never been one to hold back on taking sexist jabs at powerful women (just ask Rosie O'Donnell). His latest victim is Arianna Huffington, whom The Donald referred to as "unattractive both inside and out." Then he really got to work.
List of the Day: Losing Out on a Promotion
If you didn't get that promotion you wanted, here's what you should do next to make the most of the situation.
1. Push through the disappointment and take an honest look at your work.
2. Tell the decision maker you understand and respect their decision.
3. Have a heart-to-heart with your new boss and offer them support.
(Source: The Daily Muse)