Graham Barclay/Bloomberg News.

Credit Traders Find Refuge as Banks Hire in U.K. Corporate Bonds

  • Credit Suisse hires Sean Richards from BNP Paribas for trading
  • Credit Agricole hires Gooding, Bank of America appoints Pearce

There’s good news for Europe’s bond traders: at least one corner of the market is still hiring. 

Bank of America Corp., Credit Agricole SA and Credit Suisse Group AG added staff to start trading operations for U.K corporate bonds this year. Credit Suisse hired BNP Paribas SA’s Sean Richards this month to trade the securities, according to three people familiar with the matter, who asked not to be identified because they’re not authorized to speak about it. 

Bond traders are vanishing in many parts of Europe’s debt markets as slumping revenues and new rules requiring lenders to hold more capital and take less risk deter banks from making markets. That’s resulted in declining trade volumes, making it harder for investors to buy and sell securities.

“Liquidity in sterling bonds is far from what it used to be, so more banks making markets is good for investors,” said Iain Buckle, an Edinburgh-based investment manager at Kames Capital, which oversees 55 billion pounds ($87 billion) of assets.

Richards left BNP Paribas this month after 2 1/2 years as a trader of sterling corporate debt at the Paris-based bank. Adam Bradbery a spokesman for Credit Suisse declined to comment on the hire. Alexandra Umpleby, a spokeswoman for BNP Paribas, declined to comment on his departure.

Gooding, Pearce

Corporate bonds in pounds returned 0.05 percent this year, which compares with a loss of 0.14 percent for equivalent non-financial company notes in euros, according to Bank of America Merrill Lynch index data.

Paul Gooding, a former credit trader at Australia & New Zealand Banking Group Ltd. and HSBC Holdings Plc, joined Credit Agricole this year to set up a sterling corporates trading operation, according to two people familiar with the matter.

“Expanding our origination and trading capabilities into the sterling market is another step towards Credit Agricole CIB’s core strategy of being a debt house,” said Mariano Goldfischer, global head of credit and syndicate trading at the bank in London.

Bank of America hired Ian Pearce as head of sterling credit trading, a newly created position, two people familiar with the matter said in March. 

The average number of dealers providing prices for sterling corporate bonds was about four per trade at the end of April, down from a peak of about seven in 2011, according to data compiled by Morgan Stanley. It’s unclear if the new entrants will lift this number and still be making markets in the bonds in a few years, said Kames’ Buckle.

“I’m not sure if the turnover in U.K. corporate bonds justifies the entrance of new players,” Buckle said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE