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Morning Coffee: Happy messages in Bank of America's MD promotions. Citadel Securities needs more volatility

It's promotion season in investment banks and the new managing directors are coming thick and fast. Last week was Citi. Yesterday, it was Bank of America's turn to promote hundreds of new people. 

Bank of America may have promoted its new class of 334 managing directors earlier than usual - last year we reported on its promotions in late January, after bonuses had been announced (although insiders say the promotions were made in December). This year, BofA is giving its senior people something to celebrate in advance of the holiday season. 

Bank of America's managing directors are paid salaries in excess of $450k according to H1B visa data. In this round of promotions, however, there are fewer of them: MD promotions were 8% down on 2022. While this may be frustrating for BofA people hoping for a big title, it suggests circumspection in a challenging year; MD promotions were almost flat at Citi, prompting criticism that Citi executives have handed out promotions to keep senior people loyal in the midst of their restructuring. 

At Bank of America this year hasn't been so challenging anyway. In the markets (sales and trading) division, revenues were at their highest level for a decade in the first nine months of 2023.  This follows some fervent hiring into the fixed income sales and trading team, where the bank has doubled the size of its salesforce in key areas and increased its EMEA fixed income headcount 15% in three years. Some of those hired were included in yesterday's promotions: the new MDs include people like Nikki Acton, who joined from JPMorgan in 2020, or Bobby Previti, who came from Morgan Stanley in 2021. If you join BofA as a director, the message is that you can get promoted soon after. 

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BofA's MD promotions raise a few more awkward questions, too. If they did happen earlier than usual, it might imply that bonuses will be squeezed. Promotions in the global investment banking division also seem short on women, although more populous female MDs in the markets team bring the numbers up overall.

Separately, as Citadel Securities contemplates an IPO, volatility would be a good thing. 

Bloomberg reports that net trading revenues for Citadel Securities were down 23% year-on-year from January to September and that earnings before interest, taxes, depreciation and amortization were down around 42% over the same period. 

Slumping revenues and earnings reflected challenging conditions in the first half, but as volatility resumed in the third quarter, Citadel Securities' fortunes revived. Revenues rose 8% year-on-year in the three months to September specifically. Bloomberg reports that Citadel Securities' revenues have exceeded $1bn for 15 quarters straight.

Meanwhile...

Steve Cohen's Point72 keeps adding macro portfolio managers. Macro teams went from 41 to 49 this year and are due to hit 51 early next year. (Bloomberg) 

Marshall Wace partners shared £500m for last year, but this was down from £750m a year before. (Telegraph) 

Scrapping the bonus cap may not make much difference to bankers in London this year after all. “Banks cannot unilaterally change fixed salaries without risking significant employment disputes.” And: The only changes this year will be banks using the lifting of the cap to reward top performers now that restrictions are gone.” (Financial News) 

It's become a thing to tell employees you're going to let them go, but not to say when. Wells Fargo people are experiencing it. “Every day, you go in, and you’re like, is it going to be today?” (WSJ) 

Goldman Sachs wants to double the size of its private credit business in the medium term and has made Greg Olafson global head of the private credit business. (Bloomberg) 

Goldman Sachs hired Paul Camp from Wells Fargo to head transaction banking. (Reuters) 

The longer you work and the more you travel as an equity researcher, the better your output is. (Financial Times) 

People at Goldman are wondering why Masanori Mochida, one of the firm's longest serving partners, resigned after meeting with David Solomon. It might have something to do with the fact that Solomon raised succession planning. (Business Insider) 

80-year-old Nicolas Puech, the inheritor of the Hermes fortune, wants to leave it to his gardener and handyman. (Fortune) 

Gen Z have anxiety at work. "I'm emailing people all the time. I'm Slack messaging people all the time," she told me. "Then I get anxious: 'Am I being too much? Am I slacking someone too much?' I don't really know the protocol, as I have never been in an office." (Business Insider) 

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AUTHORSarah Butcher Global Editor

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