Morning Coffee – the Global Heads that aren’t very global. Junior Citi bankers are keeping their place in the sun
Some reorganisations tell you more about a bank’s direction and strategy than others. Of particular interest are the ones which aren’t triggered by a big resignation or external hire, and which happen close to the top of a business unit, but not right there at the executive board level. This is the level of management where the company is shaped for years, even decades to come. On that basis, Bank of America’s latest shake-up looks like it might repay a bit of analysis and speculation.
So, congratulations to Alex Bettiamo, who is promoted from heading the Latam business to be co-head of global investment banking alongside Tom Sheehan. Also to Faiz Ahmad, who goes from global transaction services to be co-head of global capital markets with Sarang Gadkari. And to Elif Bilgi Zapparoli, the previous co-head of capital markets, who will now be head of international client strategy. What does it all mean?
Well, most obviously that on the IBD side, Bank of America likes co-head structures. But there’s a less obvious point. Usually, the “global co-head” structure is put in place by a company that wants to spread its leadership out across the time zones. But unless any of the people above are planning to move geographically (something which isn’t mentioned in any of the news reports), they are all going to be based in the same region. Bank of America is beginning to look very … American.
In fact, when you compare it to the other big US investment banking franchises, this really stands out. Taking the approach of looking down the org chart to find the most senior person based outside the USA in a direct investment banking management role, we see that Goldman Sachs has Jim Esposito in London (co-head of Global Banking and Markets). Morgan Stanley has Simon Smith (co-head of Global Investment Banking). Dan Pinto at JP Morgan returned to New York in 2021, but Vis Raghawan (co-head of Global Investment Banking) remains. And Citi has Manuel Falco (co-head of Banking, Capital Markets and Advisory). The nearest equivalent figure at BoA is Bernard Mensah, but although he used to be head of FICC, his current title is “President of International”.
And it doesn’t appear to be new. As far back as 2019, it was being noticed that Bank of America “feels like a domestic U.S. business, with all the major decisions made in New York, especially with regards to risk”. Since then, London has lost importance, and the Paris office of BoA has become significantly more vibrant, but that still doesn’t seem to be translating to any interest in having someone at the top level based in the EMEA time zone, let alone Asia.
Of course, this might be exactly the right strategy; the USA is by far the biggest market and over the last five years, it’s been the best performing one, so BoA appears to have made exactly the right strategic decision in concentrating management effort on its domestic franchise. And many would argue that neither bankers nor clients in the actual business care at all about the precise title of someone ten floors above them who they will almost never meet. Nonetheless, it’s interesting that the word “global” doesn’t always have a meaning to be taken literally.
Elsewhere, when Citi launched its satellite office in Malaga, there was plenty of scepticism. People said it was a gimmick, a career graveyard and that junior bankers who were prepared to trade a somewhat lower income for more pleasant living conditions were in some way cheating.
But apparently, the pilot program of 27 analysts has been judged a success, and it’s going to be expanded. According to Nacho Gutiérrez-Orrantia, the EMEA co-head of banking, capital markets and advisory, “we’ve done well on the investment banking front, but we are exploring how to monetise this on some other fronts”.
Sceptics might take this as a slight vindication, if it means that there were, after all, problems in reconciling the demands of investment banking with the strict hours limits that were part of the Malaga package. But on the other hand, it’s just as likely to mean that there’s not exactly any point in hiring another few dozen junior IBD analysts no matter how cheap they are; Citi might be looking to staff up in wealth management or other areas. In any case, it appears that work-life balance still has its place in the sun.
Some banks are setting up “men’s networks” for white male staff. These aren’t quite the same things as the womens’ minorities and similar groups to facilitate contacts and career promotion (that’s what golf is for); they’re more like support groups run by coaching consultancies to help deal with toxic habits, mental health and burnout issues, which do disproportionately affect men. (Financial News)
It's well known that among the attractions of “Wall Street South” in Miami are a lower state tax rate, but when you seriously try to quantify the saving, it can be really very big for the kind of bankers who have made the move. (Bloomberg)
It's quite likely that there will be more news about Odey Asset Management in the near future, as it appears that JP Morgan is also “reviewing” its prime brokerage relationship. (WSJ)
Every now and then, a new piece of slang catches on among equity analysts, and it becomes irritatingly ubiquitous. In the most recent earnings season “can we double-click on that?”, as a way of asking management to expand on a topic, has caught on. (FT)
On a similar theme, Michael Casey has presumably spent part of his career at Goldman Sachs wincing as people ask him what his “deal pipeline” looks like. He’s now moving to head up the midstream and downstream oil refiners and pipeline operators advisory group at Wells Fargo, so he can hear the joke from a whole new crowd to whom it’s just occurred. (Bloomberg)
The Kodak company didn’t really cope all that well with the changing world, but its pension fund has survived and adapted surprisingly well. Having started managing the fund in the heyday of Kodachrome in the 1970s, Rusty Olson is long since retired himself, but he continues to hang around and swap investment tips with his successor. (Institutional Investor)
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