Cuts to investment banking in Australia have barely topped 10% of banking staff, sources told the Financial analysis. It has nothing to do with larger layoffs in financial centers like New York and London.
Banks have increased their junior ranks over the past two years to handle a deluge of deals, but are cutting back to deal with an expected lull in deals in 2023. There is also pressure to cut spending as many banks hired senior negotiators over the past year. who included guaranteed bonuses in their salaries before moving.
Credit Suisse plans to cut its workforce by 9,000 people worldwide, in line with an ongoing reorganization under new chief executive Ulrich Korner. Goldman Sachs introduced its annual peer review process – after suspending it for two years – to weed out underperforming bankers in September.
Changing of the guard
Credit Suisse bankers from New York to London have been bracing for layoffs for months after the Swiss investment bank announced it would restructure its plans into one focused more on advisory services and less on business capital-intensive like underwriting.
Two recently fired chief executives in New York said they filled out their resumes before they were fired. Others began looking for jobs after Credit Suisse suffered million-dollar losses following the Archegos Capital Management scandal, which raised concerns about the bank’s risk management capabilities in 2021. bank also took a hit when its funds were exposed to Greensill Capital, the supply chain lender. , which filed for bankruptcy last April.
In Australia, Angelo Scasserra, co-head of Credit Suisse’s investment bank for Australia, will leave next year, on Financial analysis‘s Street Talk reported on Thursday.
UBS also nabbed Veronica Kaufman, who handled local corporate derivatives at Credit Suisse, Street Talk reported this month. Melbourne-based Kaufman will join the Swiss rival in February as executive director of its Australian capital markets team.
Sprint to the finish
Just as companies are cutting back their teams, Australia’s investment banking divisions are ushering in high-profile deals to close out 2022.
Morgan Stanley advises Crescent Capital on a c.$800 million deal to sell its PRP Diagnostic radiology business to IFM and UniSuper. RBC Capital Markets advises buyers, Street Talk reported Nov. 1.
Barrenjoey and Jarden are advising Origin on its potential $18.4 billion sale to Brookfield and private equity firm EIG. UBS and Citi work with private investment firms.
Citi and Barrenjoey are also helping BHP pursue OZ Minerals, which is advised by Macquarie Capital, Greenhill and Gilbert + Tobin.
Bankers are keen to increase their fees for the year and to make sure they have cut some expenses. Bonus season – expected to be one of the lowest payouts in years – is fast approaching. American and European banks generally pay their annual bonuses to their investment bankers in February and March.