There are some comings and going at Wells Fargo which has started laying off equities traders after picking up senior talent from Deutsche Bank.
The U.S. lender is making the cuts in its equities trading division after admitting that operating costs were higher than expected as it dealt with the fallout of its fake account scandal which claimed the scalp of its CEO Tim Sloane. But one source said the cuts were part of the natural management cycle. “we’re always looking at areas of the business to restructure and reinvest in as a normal course of business,” the source said.
It’s not clear how many staff are affected but cuts come after the bank has been upgrading its ranks, hiring individuals from Deutsche Bank after the German lender closed is global equities business in July.
Wells hired David Murphy, Deutsche’s former co-head of US equities sales and trading, and in August appointed Bran Branken, a former senior equities trader at Deutsche to its Boston office. The bank’s equity trading business is run by Michael Riley and Matthew Brown.
Another source said the bank is looking to continue to grow its investment banking operations, an ambition which will could be tested after Wells said on its second quarter earnings call that its costs would be higher than anticipated this year after it hired thousands of staff to focus on risk controls to appease regulators after a 2016 scandal related to the opening of unauthorised accounts. This additional investment offset cost cutting measures in other areas, said CFO John Shrewsberry. The added compliance burden along with the new arrivals from Deutsche mean that the job cuts should not come as a surprise - and there could be more to come as new CEO Charles Scharf takes the helm next month.
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