Morning Coffee: 'Dignified' but unexpected pre-Christmas banking job cuts are go. Another accidental email was sent

It's Q4, which means that 'tis the season of banking job cuts. The first to shake out the seasonal ornaments is National Australia Bank (NAB), which yesterday made an apparently unexpected post saying that it will be making 2,500 roles or 6% of its staff redundant, of whom 1,500 will go before Christmas.

All these people will be treated with "dignity and respect", said NAB. They will be engaged and consulted with, redeployed and reskilled and given support in their "transition." They will also be given redundancy entitlements according to "applicable industrial instruments," which sounds complicated.

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NAB's cuts aren't really that surprising. Bloomberg notes that NAB already made cuts in its investment bank in August, when it combined origination and sales roles and said, "We recognise change can be difficult." 

For bankers and traders and bank employees in locations beyond Australia, NAB's new cuts may not seem relevant. But they are the zeitgeist. NAB is cutting to "improve outcomes for customers by reducing duplication and speeding up decision making." It is focusing on "reducing the size of corporate functions. It is "simplifying its operating model." And it's trying to "better align its workforce to prioritise growth and technology initiatives."

Bloomberg suggests NAB's doing this now because things aren't great in the Australian housing market, where a severe property downturn has weakened demand for NAB's mortgages. Australia is not alone in this. And NAB is not alone in wanting to be a sleeker place with technologically empowered humans who can handle hard change. HSBC, Citi, Standard Chartered, Barclays and others have similar intentions. 

Separately, watch what you send by email. 

Following the email error at Morgan Stanley, in which MD Mohamed Atmani accidentally sent a list of proposed deals and some prices to clients, the Financial Times reports that another accidental email was sent by the most senior people at law firm Freshfields. 

The Freshfields email concerned an exchange between the firm's global managing partner Alan Mason and its co-head of US corporate and M&A, Ethan Klingsberg. The two men were discussing how they might spin out Freshfields' legal AI unit and Klingsberg suggested they might try “sophisticated investors that are respected by the rest of the investor community for their leadership”, and then added that this “probably” ruled out “Middle Eastern sovereign wealth money”. 

The FT says Mason then accidentally emailed the exchange to a large internal distribution list, some of whom took screenshots.  

“We apologise unreservedly for a comment made about Middle Eastern sovereign wealth investors . . . the comment does not reflect the position or beliefs of the firm or those participating in that email exchange, and we sincerely regret the offence caused,” Freshfields said in a statement made to the FT on Monday. It added: “We hold our clients across the Middle East in the highest regard and deeply value the longstanding relationships and trust we have built in the region. We have enormous respect for the discerning leadership and global impact of our clients and remain firmly committed to the region.” 

Meanwhile...

Finance is full of jobs that are made up of well-documented, routine tasks where completion can be easily tracked. For banks and insurers, these might include roles handling queries from customers or other staff, overseeing approvals for risk, or monitoring technology and operations. Finance also has the highest share of occupations exposed to AI of any industry at 84%, according to the Bank of England. (Bloomberg) 

Optiver wants $900m in financing to expand its trading activities. (Bloomberg)

Private equity firms have started trying to expense private jets. (FT) 

Barclays traders discovered that it can put total return swaps referencing illiquid private credit loans in the trading book if they make them into a traded position using a matching trade with another counterparty (known as a back-to-back total return swap). It becomes a traded position even though the loan referenced is illiquid. The regulator is not so sure. (FT) 

Seth Platt is leaving Two Sigma and co-founder David Siegel must now pick his third proxy on the management committee in about two years amidst his dispute with John Overdeck. (Bloomberg) 

The dispute between Overdeck (who runs quants at Two Sigma) and Siegel (who runs the engineers building the trading systems) highlights the difference between the two jobs. “I would liken the trading and modeling to the striker, or the guy who kicks the ball in the goal at the end of the play,” said Overdeck. “Investment management is very much a team sport. I was managing the very offensive end of the field." (WSJ) 

HireVue type interviews are susceptible to fraud and interviewees are being asked to do weird things like hold up fingers and provide proof of identity. (FT) 

HSBC's departing CFO Pam Kaur has worked for 12 CEO's during her career and thinks the speed of changes at HSBC is manageable. (Financial News) 

Now is your chance to be head of asset management at HSBC. (Bloomberg) 

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