HSBC's latest plans to cut 10,000 jobs adds to an already gloomy year for Europe's bankers. (AP Photo/Kirsty Wigglesworth, file)
HSBC's latest plans to cut 10,000 jobs adds to an already gloomy year for Europe's bankers. (AP Photo/Kirsty Wigglesworth, file)
The days of scallop kitchens and corporate jets have gone as US rivals take the upper hand, reports Lucy BurtonSenior City headhunters are getting frustrated.
Inside the boardrooms of European banks they see bank bosses bickering, conflicts over strategy and poor succession planning. It is becoming increasingly difficult for them to fill some of the world's most high-profile jobs.
"At the American banks there is way more stability of leadership; here, there is infighting and a lot of CEO fatigue," complains one c-suite recruiter over a coffee in the members' club where he meets clients.
"The quality of executives [in banking] is much worse than other industries."Weary headhunters expect things to get tougher in the years ahead as more senior jobs become vacant just as banks wield the axe.
City analysts expect Antonio Horta-Osorio, the boss of Lloyds Banking Group, to leave "within a year" while RBS has promoted internal front-runner Alison Rose to the top job and HSBC is in the midst of trying to find someone to replace John Flint after his shock exit over the summer.
There are also questions over how much longer Nathan Bostock, the boss of Santander UK, will stay. With Britain's biggest banks facing changes at the top, questions are being asked about the future of European banking.
Last week it emerged that HSBC had made plans to cut up to 10,000 jobs, adding to the tens of thousands of bankers in Europe that have already lost their jobs this year.
One senior executive who spent three decades at his bank before being made redundant this summer said he knew for a while that this day was coming.
European banks have struggled since the crisis against a slowing economy, low interest rates, competition from US rivals and a string of corruption scandals.
It is a stark reversal of fortunes compared to the pre-crisis heyday, when City bankers enjoyed lavish lifestyles and RBS was famous for its corporate jet and scallop kitchen.
One veteran UK banking boss, highlighting just how much fortunes have changed since the crash, jokes that he now goes out of his way to use the cashpoint machines operated by rivals so that his bank doesn't have to foot the 20p interchange fee.
"Only when the tide goes out do you discover who's been swimming naked," said RBS chairman Sir Howard Davies last week. Photo/Mark Mitchell
With mounting fears of a no-deal Brexit and an increasingly gloomy outlook, this is a climate where pennies count.
"Only when the tide goes out do you discover who's been swimming naked," said RBS chairman Sir Howard Davies at a City event last week, using a line from billionaire investor Warren Buffett to illustrate how the market might look in a downturn.
"I plan to keep my Speedos firmly on."
CMC Markets' analyst Michael Hewson thinks bank bosses have every reason to be fearful. In his view, the European economy is pretty much "a basket case" and the banking market far too crowded.
"I'm concerned what might happen in a no-deal Brexit or escalation of US-China trade, as I don't think Europe is as prepared as it thinks given the health of the banking sector," he says.
HSBC's latest plans to cut 10,000 jobs (on top of plans unveiled over the summer to slash more than 4,000 roles) adds to an already gloomy year for Europe's bankers.
As well as sweeping job losses the sector has been tarnished by an explosive spying scandal at Credit Suisse, a legal bust-up between Santander and Andrea Orcel, the banker it hired as chief executive then changed its mind, and the unravelling of Europe's largest ever money laundering scandal at Denmark's Danske Bank.
The most drastic cost-cutting plan to take place this year has been at Deutsche Bank, which is culling 18,000 jobs.
The bank grew rapidly in the late Nineties but by 2018 was under such pressure to cut costs that it got rid of free fruit for staff.But the cuts were a long time coming.
The phrase "DB not a BB" (meaning Deutsche Bank not a Bulge Bracket [global] bank) had been circulating on social media sites for about a year, coming to fruition one morning in July when staff affected were handed a white envelope detailing their redundancy packages and told that their passes would stop working at 11am.
Those affected vowed never to join a European bank again.
Urs Rohner, president of the board of Credit Suisse (Ennio Leanza/Keystone via AP)
The Americans bounced back from the financial crisis far quicker than their European peers and continue to land a seat on the biggest M&A deals in Europe.
JP Morgan, Goldman Sachs, Citigroup, Morgan Stanley and Bank of America Merrill Lynch - an all-American line-up - have raked in the most money in Europe, the Middle East and Africa for the year to date, according to Dealogic.
JP Morgan, which reported a profit of $9.6b (£7.6b) for the second quarter, is kicking off the third-quarter results season this week, ahead of what analysts expect will be a "moderately grim" set of numbers for UK banks later this month.
Richard Hoar, who is responsible for banking moves at headhunter Goodman Masson, says it has been particularly difficult to get anyone to move jobs this year given the growing uncertainty surrounding Brexit and the rising threat of redundancy.
His firm is now looking to open an office in Frankfurt."Nobody wants to be the last person on the chess board," he says. "People are saying they're nervous about the state of banking generally."
