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The City had its bloodiest week since the 1980s. Citigroup, JPMorgan and Merrill Lynch released painful Q1s. Wachovia, JPMorgan and RBS needed more money.

Redundancies

Merrill Lynch announced it will be cutting a further 2,900 jobs in 2008 – on top of the 1,100 already sliced in the first quarter, and bringing the total up to 10% of staff, mostly from its investment bank and support areas. 400 jobs are expected to go in London.

UBS revealed plans to cut a further 10% of its investment banking jobs, with fixed income bearing the brunt of the cuts. 900 people are predicted to go from UBS’s Liverpool St offices before the end of June.

Citigroup’s new chief exec, Vikram Pandit, said he intends to reduce costs by 20%, especially in IT and operations. 9,000 job are to go worldwide, 2,000 cuts are expected in the City.

Results

If the reasons for the slew of redundancies were unclear, Q1 results at Citigroup, JPMorgan and Merrill Lynch brought them into the limelight.

Citigroup announced its second consecutive quarterly loss of $5.1bn, following $15bn of writedowns and increased losses as customers fell behind on car, home and credit-card payments.

JPMorgan revealed that its Q1 profits had halved following a $5.1bn writedown on mortgage-related assets.

Merrill Lynch was in the red for the third consecutive quarter, with Q1 losses of $2bn after it made another $6.5bn in writedowns on mortgages and other assets.

Raising cash

With no sign that things are about to improve, banks went about raising additional capital.

Wachovia managed to raise an additional $8bn in an offering of common and preferred stock.

RBS revealed that it was thinking of launching a rights issue to raise £12bn. Shareholders promptly called for chief executive Fred Goodwin to resign.

JPMorgan went cap in hand to its shareholders with plans to raise another $6bn in preferred stock at a punitive rate of 7.9% for 10 years.

It also emerged that Temasek bought $600m of Merrill Lynch shares in February. However, there was speculation that the US bank will need to raise even more capital soon.

Leveraged loans

Both Deutsche Bank and Goldman Sachs went about clearing leveraged loans from their balance sheets.

Deutsche was said to have sold $5bn of leveraged loans at a rate of around 90 cents in the dollar.

Goldman Sachs sold a more minuscule €100 million of leveraged debt at a huge discount of 65 cents in the euro.

A spate of hires proved that leveraged finance bankers aren’t entirely unemployable. Lazard hired Michael Grayer as head of debt advisory in London, and John Sinik, a former UBS leveraged financier, joined private equity firm TowerBrook to look at distressed investments made by other private equity groups.

Hedge funds

There were more tales of outlandish hedge fund pay.

It emerged that hedge fund manager John Paulson made a tidy $3.7bn in 2007.

Josh Birnbaum, a star trader at Goldman Sachs, revealed he was leaving to set up a hedge fund focused on subprime mortgage debt.

Alternative careers

For anyone not able to make a mint in hedge funds, a few alternative careers presented themselves.

Financial journalism was talked up by financial journalist Charlie Gasparino of CNBC, who said bankers are insane, and that “reporting about this insanity is the best job in journalism, and anyone who wouldn’t want to cover crazy powerful people has got to be crazy themselves.”

Failing this, the Times reported that a new porn-focused investment bank, run by a former Merrill Lynch banker, has opened in LA. There don’t appear to be any jobs going there, but providing you have a stage name, money may be available to help with an acting debut.