European banks spend €1bn to fireside employees | USAEMALL.com

One scoop to start: Cryptocurrency exchange Bullish has filed for a US initial public offering as the Peter Thiel-backed group seeks to tap surging investor demand for digital assets under the Trump administration.

And a big interview: Blackstone co-founder Stephen Schwarzman told DD’s Antoine Gara that the firm was planning to invest “at least $500bn” in Europe in the coming decade, in a bet on the continent’s growth prospects.

And another thing: Private market funds have underperformed large-cap US stocks over commonly measured time horizons for the first time in nearly a quarter of a century, as a slowdown in private equity dealmaking activity hampers the sector’s returns.

In today’s newsletter: 

The whopper exit payouts at Europe’s top banks

If you’re a top banker in Europe hoping for a cosy exit, Santander looks like the place to be.

The Spanish lender paid material risk takers an average of €780,000 in severance pay from 2018 to 2024. One lucky duck was rewarded with €11.2mn on their way out of the bank in 2021.

That’s according to the FT’s Simon Foy, who parsed regulatory filings and company accounts and found that European banks have collectively spent more than €1.1bn axing senior staff since 2018.

The bulk of that came from just three lenders: Deutsche Bank, HSBC and Santander.

Together they paid €850mn in severance over the seven-year period to employees whose professional activities had a significant impact on the risk profile of their bank.

Société Générale, BNP Paribas, Barclays and UBS doled out a total of €275mn during the same period.

Across the seven groups, 2,100 senior bankers were handed an average of €540,000 each.

The high costs reflect banks’ historical bugaboo in Europe — that lay-offs to adjust for often cyclical market conditions are high relative to the US, sometimes making them reluctant to hire in good markets.

Cost-cutters at the big banks often set their sights on material risk takers, whose chunky earnings make a sizeable dent in the balance sheet.

The good news for those folks is that now’s not a bad time to be on the severance list. Exit packages are “much more attractive today than they used to be”, says one senior financial services recruiter.

If you’re thinking of checking out, now might be your moment.

Lex Greensill dishes on SoftBank

Spare a thought for Lex Greensill.

The businessman behind Greensill Capital said this week that he still suffers from PTSD from the negotiations to save the lending firm.

Greensill took the stand on Monday and Tuesday in a case at London’s High Court, in his first public testimony since his business collapsed in 2021.

He used the opportunity to fire shots at SoftBank, accusing the investment company of being “intensely political” and confirming claims he’d previously made about its founder Masayoshi Son’s extravagant lifestyle.

Greensill Capital collapsed after a number of clients defaulted on their debts, resulting in billions of dollars in losses for investors including SoftBank and Credit Suisse.

A Credit Suisse fund has now gone to court alleging that SoftBank “co-ordinated” with Greensill at the expense of the eponymous firm’s investors. (SoftBank denies the claims.)

But Greensill suggested his dealings with SoftBank at the time of the collapse were far from comfortable.

Things started well enough. Greensill told the court that Son agreed to mentor him during weekly trips to Tokyo and said the Japanese billionaire was able to “look over the horizon in a way most ordinary mortals can’t”.

Later though, the relationship soured. Greensill said Son had made a “verbal commitment” to guarantee a risky loan, only to later claim he didn’t remember the conversation.

That resulted in negotiations in which SoftBank agreed to provide Greensill Capital with $440mn. But only after talks that Greensill claimed — in a rhetorical flourish — had left him with “third-degree burns to most of my body”.

On the first day of proceedings, Greensill appeared to say that there was a “code of silence” around negotiations with SoftBank over a restructuring. However he claimed on the second day that he had been misquoted and had in fact referred to a “cone of silence”.

Greensill also confirmed allegations he’d made previously to the liquidator of one of his companies.

He told the liquidator: “What a lot of people don’t know is that basically Masa [Son] lives a very big lifestyle, which is funded by borrowing against his SoftBank stock.”

Creditors gear up at WBD

Warner Bros Discovery’s announcement that it was splitting in two caused a splash among the company’s debtholders on Monday.

The media group said it would break up into two publicly traded companies, one focused on streaming and studios and the other on the television network business.

It plans to buy back billions in debt ahead of the deal, using a $17.5bn bridge facility provided by JPMorgan Chase, and then issue new borrowings.  

The TV business, which continues to throw off cash, will take on the majority of the new debt. That would allow the streaming business to focus on growth.

As part of that restructuring, the company said it would buy back up to $14.6bn of its nearly $40bn in bonds. 

There’s some opportunism on the part of WBD. As DD mentioned yesterday, much of its bonds are trading below par. Buying some of those back now would save it some $2bn, according to CreditSights.

That, together with the tight deadline for creditors to get in on the deal — they have until Friday — has irritated some of WBD’s large bondholders.

On a call on Monday afternoon with about 100 debtholders, law firm Akin Gump Strauss Hauer & Feld said creditors holding hundreds of millions of dollars in debt were very upset with the turn of events, DD has learned. (Akin didn’t immediately respond to a request for comment.)

It’s not all bad news for creditors, though: the legacy TV business will be dealt a 20 per cent equity stake in the flashier streaming business. It’s a generous offer that gives holders of the legacy business’s debt some good collateral.

Nonetheless, expect frantic conversations among creditors and their lawyers in the coming days as they weigh up their next moves.

Job moves

• JPMorgan Chase said that Guillermo Baygual would leave after 26 years at the bank. He is currently global co-head of the infrastructure and strategic investors group. A successor will be named “in due course”.

• BP is hiring Kirsten Smart, HSBC’s former global head of media relations, DD reports. Meanwhile, David Nicholas, BP’s head of media relations, is retiring at the end of the year. Rita Brown, his deputy, will replace him.

• The US Treasury department has appointed Joseph Lavorgna as counsellor to the secretary. He joins from SMBC Nikko Securities, where he was managing director and chief economist for the Americas.

• D’Angelin & Company, the boutique bank led by dealmaker Benoit d’Angelin, has appointed ex-Brunswick chief operating officer Helen James as a senior adviser.

• White & Case has named Helen Croke as a partner in its global M&A practice and private equity group in London. She joins from Ropes & Gray.

Smart reads

Hot Money Remember Wirecard? In the latest season of the FT’s Hot Money podcast series, reporter Sam Jones digs into the murky past of ex-chief operating officer Jan Marsalek, discovering a world of warlords, espionage and disinformation.

Crisis to cash After two deadly crashes and a lost door panel, Boeing’s reputation looked irredeemable, the FT writes. Now cash flow is up, but the planemaker’s turnaround remains up in the air. 

Salvaging a superyacht Crews in Italy are battling to extract the wreckage of the late Mike Lynch’s Bayesian superyacht. The Wall Street Journal details how in this short visual story.

News round-up

Meta plans to invest $15bn in Scale AI in bid to catch up to rivals (FT)

Trading firm Tower Research to launch fund for outside investors (FT)

Panama Canal boss warns MSC ports deal threatens principle of neutrality (FT)

Citi to boost provision for potential bad loans on US economic worries (FT)

UK FCA gives green light to Pisces share trading scheme (FT)

Toyota and Daimler broker $6bn Japan truck merger to fight Chinese rivals (FT)

Vaping growth falters as Big Tobacco hunts for lifeline (FT)

BlackRock seeks dismissal of Texas antitrust case over coal production (FT)