Morning Coffee: Citi's investment bank restructuring makes London bankers firmly in charge. Asian trading windfall at JPMorgan
If you're a senior US-based investment banker at Citi now, you might be wondering whether your formative years were spent on the wrong continent. Following last week's news that Jens Welter is moving from London to New York to run North American investment banking coverage, Citi's US bankers seem a little overlooked.
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Welter has spent most of his three decade career based in Europe. A FINRA registration indicates that he was in the US between 1998 and 2004 with Credit Suisse, and again with Credit Suisse between 2015 and 2023. However, Welter was the EMEA head of investment banking at Credit Suisse from 2017 and only took on a global role in 2022, shortly before he left for Citi. - He therefore can't have been in the US that much.
From now on though, Welter will be in the US all the time. He'll be working with Vis Raghavan, another banker who spent his career in Europe and who's moved to New York, where he's running Citi's banking business globally, including the investment, commercial and corporate banks. Also in America is Achintya Mangla, Raghavan's colleague from JPMorgan who was officially hired last month and who's now running 'financing', including ECM, DCM, syndicate and capital markets. Mangla also spent much of his career in Europe and hasn't been registered in the US before.
All three men were recently hired-in from outside.
Where does this leave Citi's homegrown American bankers? In the layer below the new London bankers, seems to be the answer. Raghavan is the big boss, Welter and Mangla are his lieutenants and various US incumbents report into them. Doug Adams and Richard Zogreb are reporting into Mangla in ECM and DCM respectively. A smattering of other US bankers (eg. Phil Drury, Stephen Edelman) run sector teams, reporting to Welter.
It's not clear how they feel about this. US bankers who might have had senior positions in the investment bank seem to have moved aside or overlooked. John Chirico, the former head of North American Investment banking at Citi has made a curious move into corporate banking, apparently to accommodate Welter. The M&A business globally is being run by Kevin Cox, the former co-head of North American investment banking with Chirico, but only on an interim basis. Citi declined to comment on what will happen permanently.
Welter aside, the other winner from the Raghavan reshuffle at Citi seems to be in London. With Welter in New York, Nacho Gutiérrez-Orrantia seems to have got some of his old job back and is now head of UK, Europe and MEA investment banking coverage instead of just 'Head of Europe Cluster and Banking.' Nacho and Welter were once co-heads of Citi's investment banking business together in EMEA, but Nacho was displaced in last November's reshuffle.
Separately, China may not have unveiled the sort of stimulus plan markets had hoped for, but JPMorgan's Asian equities traders have already booked their profits anyway.
When the US bank announced its third quarter results last Friday, it revealed a 27% year-on-year increase in equities trading revenues by virtue of "supportive trading environment in the U.S. and increased late-quarter activity and increased late-quarter activity in Asia."
The third quarter ends in October, so the Asian activity referred to doesn't cover the 10% jump in Chinese stocks after the Golden Week holiday earlier this month, amidst hopes for enormous government stimulus for the Chinese economy. Some of those gains have since been lost, but if JPMorgan's equities traders were doing well from Asian volatility in late September, they may have done even better since.
Meanwhile....
UBS Chief Operations and Technology Officer Mike Dargan says the Credit Suisse IT integration is on track and getting emotional. "We put a couple of hundred clients of different complexities from Hong Kong and Singapore through a test case in September...This went very well. The entire floor was applauding. There were tears." (Reuters)
As healthcare investment opportunities fall, Apax Partners has disbanded its healthcare team and assigned its members to other jobs. (Bloomberg)
JPMorgan's investment banking business was bolstered by opportunistic bond issuance among clients and by the closing of some mergers and acquisitions earlier than expected in the third quarter instead of the fourth. But investment banking is not back. (Bloomberg)
Citi accounts for 60% of ECM revenues in Taiwan. (Bloomberg)
Canaccord Genuity hired Nadine Ahn as deputy chief financial officer, with plans to move her into the CFO role next year. RBC is accusing Ahn of having an affair with a subordinate. Canaccord said: “She’s incredibly experienced and fits like a glove inside this organization. We’ve done an immense amount of diligence on her.” (Bloomberg)
Moody's says Platinum Equity, Clearlake Capital and Apollo Global are struggling with the hefty debt loads of their holdings. Nearly a quarter of the Apollo-owned companies that Moody’s rates have defaulted since 2022, while 47 per cent of Ares-backed companies they follow are distressed. (Financial Times)
A woman who sued her former employer after colleagues failed to give her a leaving card has been unsuccessful after it emerged that managers decided not to give it to her because so few people had signed it. (The Times)
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