Goldman's Q3 results are out. They look good. So far this year, profits are up a massive 191% on the same period of 2011. Goldman's revenues are up 9%. This looks pretty good compared to arch rival JPMorgan, where investment banking profits fell 15% year-on-year in the first nine months and revenues were down 6%.
However, any excitement about Goldman's achievement has been eclipsed by today's other surprise news: Vikram Pandit is leaving Citi. He has resigned. Not only is Pandit going, John Havens, his number 2 and long term pal is going too. Replacing Vikram is Michael Corbat, a Citigroup lifer who joined the bank straight out of Harvard in 1983. Most recently, Corbat was CEO of Citi's EMEA business. He's has been based in London since 2005 (or at least has been registered with the FSA since then - he only became head of EMEA in 2012) and was a senior manager at Citigroup's global markets and equities business. Corbat's ascension as CEO of the entire firm can, surely, only be a good thing for Citi's investment bankers in London? Interestingly, yesterday's results revealed that Citigroup's EMEA investment banking operations are by far its largest - accounting 33% of its investment banking revenues globally. Was Corbat chosen partly because of his experience at running such an important part of the business at such a difficult time for Europe?
In the meantime, over at Goldman Sachs, things are looking distinctly perky. Not only have profits and revenues picked up keenly, but Goldman's investment bankers have regained their right to pout at the top of the pay table. Average compensation per head increased 15% in the first nine months of 2012 vs. the same period of 2011 - to $336.4k. This implies that the average Goldman banker will earn $449k for the full year. JPMorgan investment bankers may feel envious: their pay fell 6.9% in the first nine months and they are on track to earn $359k. In other words, the average Goldman banker earns 25% more than the average investment banker at JPMorgan.
There was also little sign of redundancies at Goldman in the third quarter: the bank increased headcount by 300 people.
Corbat was Pandit's repair man. (WSJ)
Michael Corbat was heavily fancied by Harvard dinner ladies, did not watch TV as a child and was known for being outgoing and selfless. (Harvard Crimson, 1982)
Compensation at Goldman Sachs this year is looking far more healthy than compensation at Goldman Sachs last year. (Zerohedge)
Goldman’s ROE was 8.6% in the third quarter. In Q3 2011 it was 5.5%. (Financial Times)
RBS has suspended Jezri Mohideen, head of rates trading for Europe and APAC. (Bloomberg)
Australian banker starts at a boutique, goes to Goldman for five years, returns to boutique. (WSJ)
Traders in the City of London will pay up to €17bn a year under the EU’s plan for a financial transaction tax but none of it will go to the British Treasury because they have opted out, according to accountants Ernst & Young. (Irish Examiner)
Former Credit Suisse and Soc Gen bankers have set up Sycomore Corporate Finance (sic), a Paris-based boutique with 10 employees. (Reuters)
UBS’s CFO says Kweku Adoboli was directly responsible for job cuts and smaller bonuses. (The Times)
Specifically, Kweku Adoboli may have caused 550 job cuts at UBS. (Bloomberg)
Jefferies has got a licence to trade futures in Singapore. Right now it employs 7 people there, but says this will grow. (FT)
Mercuria, CWT, Noble, Gunvor, and Freepoint Commodities are challenging Glencore and Trafigura in metals trading. (FT)
Greg Smith has not spoken publicly since the publication of the March article. He is scheduled to appear Sunday on “60 Minutes.” (Dealbook)
"The French are spiteful towards the rich. In the US, wealth is seen as a sign of success and it is very good like that. In France, it is just the opposite. If you are rich you have to prove that you are honest, whereas if you are poor it is because society is unjust.” (The Times)
The UK government is hiring a director general of trade and investment for China, and paying £120k.(Telegraph)
London should love its bankers- the full 1.5 hour debate. (Youtube)
If you have a job, you are damn LUCKY - not more talented or smarter or a harder worker. Don't complain on Facebook about how busy or stressed you are. There are plenty of us who would trade places with you in a heartbeat. (Gawker)