Nordea Loses Top Sell-Side Bankers as Cuts Start Hitting Morale
(Bloomberg) -- Nordea Bank AB has recently lost a number of its top sell-side bankers amid complaints that management’s focus on cutting 6,000 jobs is hurting morale in key parts of the business.
Examples of recent departures include the head of fixed income at Nordea Markets, Torben Pedersen. He’s in the process of starting his own hedge fund with Erik Bo Hansen, who used to be Nordea’s head of global trading at its fixed-income, currencies and commodities unit. The chief sales manager at Nordea Markets, Bjarne Hammeken, left to work for the Danish fund HP Fondsmaeglerselskab. Jan Erik Nilsen, who used to be the head of fixed-income sales at Nordea Markets in Oslo, left for a similar role at SEB AB, a competing Swedish bank.
Nordea’s own figures suggest that about 2,650 full-time employees have left the bank since the end of September last year. The job cuts were announced in October (of the 6,000 targeted, two-thirds are full-time employees). The bank currently has about 29,300 people working for it.
Erik Nordenskjold, who until this month was an investment strategist at Nordea in Stockholm, said highly experienced people are leaving because of the “stress” caused by the focus on retrenching.
“It creates an incredible unease in the organization, where the positioning of the managers prevails over the business skills,” he said in an email. “The individuals that care about the clients get no room to be heard, therefore they quit.”
Nordea says it’s doing what it can to ensure employees aren’t unsettled by the prospect of mass job cuts. Christian Steffensen, head of communications at Nordea in Oslo, says the bank is “on target” with the reductions, though he declined to elaborate.
“Transformation is always demanding, and it’s affecting many people in the organization,” he said. “We’re eager to make sure we look after those people affected and have, among other initiatives, created a unit, Job Mobility, that will support employees in identifying opportunities, both outside and inside Nordea.”
Chief Executive Officer Casper von Koskull has said the goal is to become a more efficient bank that relies less on humans and more on automation. Second-quarter results were the first indication that his vision is bearing fruit, as costs fell, profits rose and the bank’s shares enjoyed a rare bump in connection with earnings.
To be sure, the picture appears to be different on the buy-side. Earlier this year, the head of Nordea’s wealth management unit, Snorre Storset, said he’s still hiring after adding about 75 people in a year.
Steffensen says it’s “difficult to provide good net figures for Wealth and Asset Management,” in part because Nordea sold units in Luxembourg and Denmark. “In general, we can say that Nordea has big ambitions in Asset Management, and that we’re also hiring in this area,” he said.
Most research analysts covering the bank seem to approve of what it’s doing. Of the 29 Nordea analysts who provide their ratings to Bloomberg, only four are advising clients to sell. Shares at Nordea have fallen considerably less than the Bloomberg index of European financials this year.
But behind Nordea’s outperformance is a growing sense of unease among many employees, according to Nordenskjold.
“The cuts are made rather perfunctorily and probably contribute to younger individuals leaving before they are fired in the next reorganization,” Nordenskjold said. “Automation is the new hot thing and everyone with career ambitions must work with it.”
Other bankers to have left Nordea include Nikolaj Lynge, who was head of corporate FXMM sales at Nordea Markets. Gaute Marius Langeland, who used to run research at the markets unit in Oslo, has moved to a job at Norway’s sovereign wealth fund.
In Finland, where Nordea is moving its headquarters in October, the former deputy head of personal banking, Riikka Laine-Tolonen, has moved to Danske to lead its retail operations in the country. Mikko Ayub is leaving Nordea’s commercial and business banking unit to join Aktia Bank Oyj as its CEO.
Finland’s financial regulator said last week it hired Sari Lindqvist from Nordea to head its off-site supervision of banks (excluding Nordea).
Meanwhile, the Finnish FSA has been building up its staff precisely in order to help it supervise Nordea, which will be one of only eight global systemically important banks in the euro zone once it moves to the Finnish capital from Stockholm.
The regulator “can’t hire Nordea staff to supervise Nordea,” according to Jyri Helenius, head of banking supervision at the Helsinki-based FSA. Of roughly 30 vacancies, “most” have been filled, he said by phone.
“We are going to be supervising a very interesting bank,” he said of Nordea.
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