The Swiss are finally doing what should have been done in the first place by completely gutting prime services and investing instead in the core leveraged finance sponsors franchise and advisory/M&A 
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I read they are scaling back their investment banking business? Does this mean that interns are screwed?
yup
I read they plan on cutting 500 out the 17,500 jobs they have in the IB division. They seem to trim IB slightly but it has shown to be a profitable part of their business despite the scandals and the CEO wants to keep IB as much as possible. Analysts also seem to talk about a modest restructuration focused on growth potential of winners and major shrinks in losing parts of the business, so IB should not get slashed as much.
So I think it’s not that bad for IB, but there’s a chance some intern offers will be pulled imo (Im just a prospective monkey tho)
Most places cut this amount of bottom performers annually I think anyway, no?
Honestly they’re hemorrhaging bankers. At least here in Canada they’ve lost 8 out of their 9 MDs in the past year or so. Their global co-head of energy also left to go to MS. Can’t speak for elsewhere but their reputation here in Toronto/Calgary has definitely diminished.
The funds being pulled from the IB are all coming from prime brokerage. Investments will continue to be made in key IB franchises (per investor day presentation, sponsors, lev fin, equities, tech, etc.)
They're axing prime brokerage, no positions in the actual investment bank in the sense of these forums - ie M&A, coverage, cap markets is being affected
Did anyone read the WSJ article on this? Sounds like the focus is way more on PWM vs IB.
“The Swiss bank said Thursday its central mission will be catering to the world’s rich with private banking and wealth management. That flagship business, currently managed across geographic units, will sit under one roof and invest for growth with new hires and a target to boost assets to around $1.2 trillion by 2024, from under $1 trillion now.”
From same article after discussing dismantling of prime brokerage:
”The investment bank, which also advises companies on mergers and issuing debt and equity, will otherwise remain largely intact, the bank said.”
sounds like IB is fine outside of prime
Is NYC IB going to remain stable?
Yes, prime brokerage is just getting fucked
The new chairman gets it. This is actually the best thing that could’ve happened to IBCM. Prime brokerage was totally awful from a risk/reward standpoint, and now the bank can actually allocate the lion’s share of IB capital towards its real profit drivers via advisory/capital markets and its #1 ranked sponsors levfin franchise. There is so much capital about the be deployed in PE (literally trillions in dry powder) and CS has a market leading position to rake in huge fees by originating all that LBO debt.
Coverage and advisory (IBCM) just had another record-breaking quarter and it’s comparatively such a consistently high-margin business — Swiss management finally realized where it’s competitive advantages lie. If you’re an IB analyst at CS, this is great news, and even if you’re in S&T this may not be all bad (for instance, positive for ECM, securitized products, and derivatives).
Still a great group, but for past 2 years, Sponsors LevFin has been JPM #1 and, recently, BofA #2, with CS as #3
Yes, but JPM does well primarily because of its balance sheet. FSG at BofA/CS is more attractive at the analyst level for experience/exits because it’s an analytical/banking role whereas JPM is more capital markets focused and does more investment grade stuff.
Edit: Was talking about JPM Lev Fin (still absolutely a top tier group, just more capital markets focused)
How would you rank those sponsors groups for someone looking for a PE exit?
.
Looks like its for prime brokerage, and they'll likely cut VPs first before touching the juniors
As an incoming ER Summer Associate, how will this impact ER?
Yeah, what exactly are prime services?
I read it over it CS said they are strengthening their WM in partnership with the research franchise so I don’t think it affects ER.
Person that I interned with just (over the summer) went to CS prime brokerage, lol what amazing timing.
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