Investment banks scramble to fill top jobs in Italy
October 21, 2016 | Reuters
Headhunters are trying to lure Italian bankers in London back to jobs at home, hoping to use Britain's vote to leave the EU as leverage to fill a string of vacancies at investment banks in Europe's fourth largest economy.
American, British, French and Japanese investment banks are looking for a total of six dealmakers to head their businesses in Italy after a number of senior bankers jumped ship for top jobs at Italian corporates.
Bank of America's chief executive in Italy Marco Morelli, Nomura's top Italian banker Francesco Mele and Barclays' Italy head Alessandra Pasini have all ditched investment banking for executive corporate jobs.
Senior staff in Italy have also left Societe Generale and HSBC in recent months, sources told Reuters, while BNP Paribas is interviewing candidates to head the corporate division of its Italian subsidiary Banca Nazionale del Lavoro (BNL).
The banks declined to comment on their hiring plans.
Since the start of the financial crisis, life in companies outside the financial sector has become increasingly attractive for senior bankers, whose jobs now involve dealing more with restructuring plans, cutting costs and compliance work.
"At a certain stage in your career, if you're being offered a prestigious corporate role, it's hard to refuse," said Anna Marietta, a partner at executive search firm DHR International.
Goldman Sachs rainmaker Simon Dingemans joined British drug firm GlaxoSmithKline as chief financial officer (CFO) in 2011, Goldman's Anthony Noto left the bank in 2014 to become Twitter's CFO while Morgan Stanley's Ruth Porat became CFO at Google's holding firm Alphabet in 2015.
The vacancies in Italy come at a crucial time for investment banks in the country as they battle for lucrative work helping lenders Monte dei Paschi di Siena and UniCredit raise billions of euros in capital.
"There is an unprecedented game of musical chairs in the Italian investment banking industry," said a senior Italian banker who is in the running for some of the top jobs.
"We're seeing a high number of talented investment bankers moving on to corporate life but big banks remain committed to Italy," he told Reuters.
Still, finding the right people for such senior roles in Italy can be tough, as many Italian bankers tend to base themselves in London where there is a wider variety of work, as well as better tax rates.
For example, just 1 percent of the top five U.S. banks' European workforces were based in Italy in 2014, according to think-tank Bruegel, despite the country being the fourth biggest fee-earner in Europe for banks. For those major U.S. lenders, 88 percent of their European staff were based in Britain.
But with investment banks expected to start moving staff across Europe following the Brexit vote, recruitment consultants say there may now be more incentives for Italians to relocate to the country's financial capital in Milan.
"Brexit could be a facilitating factor," said DHR International's Marietta. "The UK is changing, psychologically it could play a role."
Italy is home to some of the biggest fee payers in Europe. Ailing lender Monte dei Paschi paid banks more than 400 million euros ($438 million) for two capital increases in as many years and is now working on an expensive rescue plan.
Bankers say this means Italy remains an attractive market to enter and U.S. investment bank Jefferies recently started operations in Milan. It has just hired Mauro Premazzi from Bank of America and is seeking to establish a foothold before expanding its Italian team, the sources said.
A spokeswoman at Jefferies declined to comment.
Headhunters will, nevertheless, have their work cut out as the list of recent departures in Italy is long.
Societe Generale's group country head in Italy Patrizia Micucci stepped down in July while HSBC's head of global banking for Italy, Stefano Giudici, who was responsible for investment and corporate banking in the country, left in September.
A Societe Generale spokesman confirmed Micucci was no longer with the bank, adding that Roberto Pecora, head of Societe Generale's market activities in Italy, has been managing its corporate and investment banking activities in the country on an interim basis since July 28.
French rival BNP Paribas is looking to hire a new head for BNL's corporate division as it wants to develop closer ties with small- and mid-sized corporate clients served by BNL, the sources said.
Bank of America and Nomura, whose top bankers Morelli and Mele became Monte dei Paschi's chief executive and chief financial officer, have instructed headhunters to find candidates for their Italian businesses, the sources said.
Societe Generale is also working with headhunters and its recruitment process is more advanced than at Barclays, which is still digesting the departure of Alessandra Pasini, who became CFO at Italian utility Snam on Sept. 27.
Earlier this year, Barclays hired veteran Italian dealmaker Carlo Calabria as chairman of mergers and acquisitions for Europe, Middle East and Africa, bringing eight of his colleagues from CMC Capital, the boutique advisory firm he set up.
Two of the sources said the British bank may select its new Italy head from Calabria's team but cautioned that no final decision had been made.
Bank of America's Diego De Giorgi, who was recently made sole head of global investment banking, will have the final word on the selection of its new Italy chief, which is seen as the most prestigious job with possibly an additional role up for grabs as head of investment banking Italy.
Still, running the Italian franchise of a large international bank comes with the challenge of delivering ambitious growth targets in a largely flat market, even if there is money to be made with lenders such as Monte dei Paschi.
Investment banking fees in Italy were down nearly 30 percent last year to $1.28 billion, reflecting a more general slump in banking fees worldwide.
So far this year, banks have earned $863.9 million from Italian deals, mostly from mergers and acquisitions, as opposed to $3.7 billion in Britain, $2.1 billion in France and $1.4 billion in Germany, according to Thomson Reuters data.
"Banking is just a harder industry right now to be in," said Logan Naidu, chief executive at recruitment firm Dartmouth Partners, pointing to regulatory pressures, lower compensation and competition from specialised boutique outfits.