Goldman Sachs reported a bad set of third quarter results yesterday. The badness of Goldman's third quarter was, however, nothing compared to the awfulness of Greenhill's. The M&A-focused advisory bank revealed an 80% reduction in third quarter profits when it reported yesterday, leaving it with a painfully thin profit margin of just 4%.
Goldman Sachs cut third compensation accruals by 35% year-on-year to protect its profitability. Greenhill has seemingly decided such measures are not necessary. Compensation expenses at the bank fell a mere 20% in the third quarter and are up 13% year-on-year after a strong first half.
Nor was there any mentions of redundancies. Instead, Greenhill has been doing a bit of hiring. Back in 2012, it recruited the aptly named Luca Ferrari from Goldman Sachs as head of North European M&A and said that Ferrari would focus on expanding Greenhill’s presence across Continental Europe. More recently, it's recruited senior bankers for Brazil and Australia. In the UK, the Financial Conduct Authority Register shows that Greenhill's had a steady 16 registered staff since March 2013.
Greenhill's people are mostly M&A bankers, who can always point to their pipeline of coming deals and insist that things will get better soon. However, Greenhill's bankers globally need to hope that the third quarter was a mere anomaly. If not, some difficult decisions could be forced up on them before the end of this year.
Traders at Barclays, Citigroup and Royal Bank of Scotland Group are being scrutinized by regulators investigating manipulation of the FX market. (Bloomberg)
How traders might have made money manipulating the currency markets. (Quartz)
Senior staff never leave Goldman Sachs, they just become advisory directors. (Bloomberg)
Bonuses have been all but abolished at Rabobank. (Financial Times)
“The issue of bankers’ pay is the only one on which the UK has been outvoted on since I have been in charge of financial regulation,” said Michel Barnier, EU Commissioner for financial services. (Evening Standard)
Questions you can ask in any job interview. (CareerSherpa)