Morning Coffee: Bank of America's big downer. The senior woman who left Citi with no job to go to

In case you didn't know it, the Barclays Global Financial Services Conference is on. Speaking at this conference are all kinds of CEOs of large global banks. 

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Yesterday's speakers included Gonzalo Luchetti, the shiny new CFO of Citigroup and Brian Moynihan, the deeply embedded CEO of Bank of America. Luchetti said things like “September is a key month. These few weeks are very meaningful,” and that severance will be increased between now and the end of the year, meaning more job cuts.

Brian, though, made some more startling declarations. He said the third quarter isn't going as great as the first and second quarters, prompting a 6% in Bank of America's share price at one point yesterday. Investment banking fees across the market are down by 10% in the third quarter according to Dealogic, said Brian. BofA's fees may be slightly more disappointing still: $1.6-$1.8bn are expected; Bloomberg notes analysts were expecting $2bn. 

Nor will the markets business pick up the slack. Although Brian Q3 will "be one of the better third quarters we ever had" for sales and trading, he also said that things are slowing. Fixed income revenues are down and erratic. Equities revenues are up, but up by less than before because Asian prime broking isn't what it was now that "people pulled the risk back."

Moynihan seemed unperturbed by all of this. "We feel the underlying economy's good and the business is good," he reflected. The 6% decline in BofA's share price suggested his ebullience wasn't assimilated elsewhere. 

The question now is whether other banks will suffer similarly. Moynihan said BofA's bankers may have underperformed because they're not well positioned in sectors with a lot of activity (TMT). The hope is that BofA is an outlier.  Luchetti said Citi's bankers and traders are heading for low and mid single digit revenue growth respectively. Goldman CEO David Solomon speaks tomorrow. In the meantime, Brian sparked a low single digit decline in the shares of Goldman, Morgan Stanley and Citi, too, none of which bodes well for jobs or bonuses. 

Separately, Financial News spoke to Alison Harding Jones, who is co-head of Deutsche Bank's investment bank, but who previously ran EMEA M&A at Citi before leaving in March 2023. 

Jones, who is also known for her chickens, said she left Citi and took 10 months off. This "gave me the space to make a considered decision with a clearer perspective," she declared. "That time was invaluable.”

Having this perspective was important, said Harding Jones. Those 10 months allowed her to choose Deutsche Bank, where the subsequent retirement of Mark Fedorcik fortuitously allowed her to take his job. Under her management, Deutsche Bank is hiring. It wants a top five position in Europe and Asia and is adding 60 bankers globally. "The UK is a critical market where we see significant opportunity," she declared, implying more bankers will be hired in London especially.

Meanwhile...

Dan Dees, co-head of global banking and markets, said financial sponsors still aren't back in the market. "While activity in that patch is up year over year, it’s up much less than the broader market." (Bloomberg) 

Hedge fund Elliott paid its staff an average of almost £1 million each last year. (The Times) 

Entry-level tech job postings have plummeted 49 percent in New York City since 2022. (NYCFuture) 

Capping bankers' bonuses is a dangerous thing. “The bonus cap can backfire: projects with a high probability of failure can become attractive...The higher fixed pay offers the manager better insurance against failure, while the bonus, even if capped, still offers some reward in case of success.” (Bloomberg) 

Crispin Odey has a sausage named after him and is known for his prodigious appetite. At one midweek meal with a journalist, he paired steak and kidney pudding and mash with a “side order” of a loin of beef and two bottles of wine. (Telegraph) 

Crispin Odey wanted to overturn his lifetime ban but judges in an upper tribunal yesterday found that he had, "a warped set of values based on a strong sense of entitlement” and was “motivated by his own self-interest and self-preservation so as to avoid accountability.” (Financial Times)  

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