Citi's equities business might need some new hires
When Citi reported its third quarter results last month, its revenues suggested that M&A bankers there have been having a hard time relative to rivals, and that its equities salespeople and traders aren't especially thriving either. Although Citi's equities trading revenues were up nearly 33% in the first nine months, this was the worst performance of 10 major banks (save SocGen). In the third quarter, Citi's equities sales and trading revenues rose only 14%; Goldman's were up 72%.
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What went wrong? It's not entirely clear. Citi said equities revenue growth was offset by a decline in derivatives revenues. Citi was the only major bank that said its Q3 equity derivatives sales and trading revenues fell year-on-year, although Wells Fargo said the quarter was tougher.
Speaking during the investor call, Citi CEO Jane Fraser said Citi was "late to invest in equities” and is trying to catch up. - "What we are systematically doing is scaling our equities business, primarily by committing the resources to grow the prime balances, making the necessary investments in technology,” Fraser declared. "So you’ll see us steadily investing in execution.”
The implication is that Citi will be hiring some new people in equities. This might be a good thing, as various people have left in recent months. "There is a hole that needs filling," suggests one trader at a rival firm.
The most recent departure is Stefan Herrenknecht, a pan-European sales trader whose gone to Bank of America after nearly 29 years. Previous exits include: Ross Taylor, head of emerging markets sales trading, Ross Whittaker, an MD working on electronic sales trading in Hong Kong; Gabriel H. Tucci, global head of the equities execution quant team in New York; Jamie Miller, the co-head of EMEA electronic execution; and Anissa Dhouibi, Citi's former global head of equities quantitative analysis, who's now at Millennium. Dhouibi role was filled by London-based Holmi Atig in July.
Fater Belbachir, Citi's global head of equities trading, previously spent 15 years in equity derivatives trading at JPMorgan. Following the last quarter, he may want to hire some new equity derivatives traders too.
Citi declined to comment.
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