We’re wondering if it’s something in the Tokyo water — or perhaps it is all about the strange and increasingly vexing twists and turns of Japan’s new(ish) Hatoyama government. Or maybe it comes down to the old motive for just about everything in the big, wide world of investment banking: money.
Citigroup has just become the third big US bank (at least) in under four months to decide to pull its Japan chief out of the country.
As the FT reports on Monday, Douglas Peterson, Citi’s top executive in Japan, will shortly move to New York to become chief operating officer of Citi’s North American commercial and retail banking operations. He will be replaced by Darren Buckley, chief executive of Citibank Japan, Citi’s local retail banking operation.
The Wall Street Journal, which reported the move on the weekend, noted that Peterson, a long-serving Citi veteran who has headed the group’s Japan operations since May 2004, presided over strong growth in the business. But when the financial crisis struck, he was forced to switch gears and shrink the firm rapidly to help the group repay its $45bn US bailout funds.
Before Citi’s move to replace Peterson, Goldman Sachs decided late last year to move its head of Japan operations, Kevin Quinn, back to the US in the first half of 2010.
And then JPMorgan decided to move its Japan chief Gregory Guyett to London (also in the first half of the year).
Is this all a coincidence?
Guyett — a long-serving JPMorgan executive — has only been in Tokyo since September 2007 and appeared to be doing a fine job, with what seemed like a brief to beef up key parts of the business — fixed income, for example — and to recruit top talent.
But like his counterparts, Quinn at Goldman, and Citi’s Peterson, Japan has not been easy for foreign (or any) investment banks in the past 18 months. For Quinn, who had to oversee the dismissal of entire teams, and for Peterson — who had to endure protracted negotiations to sell off or wind down bits of Citi’s Japan operations — it has been undoubtedly painful.
It is not clear who is replacing Guyett or Quinn. But Citi’s move to replace Peterson from within the group with a Japan-based executive who knows the ropes, reflects the banks’ cost considerations — and could signal the end of the era when US banks would ship their high-flying heavyweights into Japan on lavish expat packages.
Undoubtedly others are set to follow. Already there are rumblings at Morgan Stanley Japan, which last month appointed two Japanese executives from within the ranks to head its financial group, amid ongoing shuffles triggered by the handover from CEO John Mack to James Gorman.
Related links:
Japan’s JGB dilemmas – FT Alphaville
Japan equities: The midget is limbo-dancing – FT Alphaville
Japan’s new ministers for disruption – FT Alphaville