The longer 2019 goes on, the more it becomes apparent that this is not a good year. It's one of those years in which a disappointing first quarter sets the tone for a tired nine months. "Lumpy" was the word Morgan Stanley CEO James Gorman used to describe the M&A pipeline yesterday. - "Lumpy" and "challenged," neither of which sound reassuring if you're hoping to still be employed come 2020.
Banks have already made job cuts. What with widespread redundancies at Nomura, the surprise call for managing directors and directors to put themselves forward for redundancies at MUFG, and cuts at Barclays, Morgan Stanley, SocGen and BNP Paribas, 2019 has already proven harsh. And at some banks it may become harsher still.
Market intelligence firm Tricumen has just released its 'famous' spider charts for the first quarter of 2019. Pasted below without further comment, these show Tricumen's informed estimates for comparative global revenues per head at different banks in different markets.
Where a bank's red dot is close to the centre of the chart, it suggests its employees are extremely inefficient compared to rivals' (and could therefore benefit from being pruned). Where a bank's red dot is close to the outside of the chart, it suggests that employees generate far higher revenues per head than at rivals (and are therefore comparatively safe).
There are some surprises, but as a fairly predictable rule of thumb the safest jobs right now seem to be at the big U.S. banks, whose employees are far more productive. The most precarious jobs are at those banks whose dots are nestled in the centre of the charts - and these are mostly European.
Revenues* per head, by market, Q1 2019
*Source: Tricumen. Notes: (1) TRIC product definitions, standard deviation, product Level 1; (2) Operating expenses exclude one-off non-operational items, insurance-related benefits & claims, and credit expense/recovery/NPL provisions. Capital expenditure is included as accrued. Litigation expense is allocated to front-line units. (3) positive values = outperformance; negative values = underperformance, relative to the peer group featured in this report; (4) missing values = not included in ongoing coverage or a bank is not a significant competitor in this market; (4) outliers are excluded.
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