Bank hiring: the sector breakdown
Source : http://www.efinancialnews.com/story/2010-02-16/banks-recruitment-sector
Matt Turner
16 Feb 2010
Cash equities traders and salespeople are among the most in demand talent for investment banks, with a large amount of hiring also taking place in back office roles such as risk management, accounting and product control, according to headhunters.
Andrew Davies, managing director of Morgan McKinley’s financial services division, said: "“In the front office, we’re seeing there is more demand for traders, and specifically within the trading side of things, it is on the vanilla products – cash equities and fixed income.”
He added: "With corporate finance guys and the M&A guys, we’re seeing an increased amount of recruitment which started in quarter four, for analysts and associates, so the more junior side of things. Specifically, [they are hiring in] financial institutions and energy, power and natural resources.”
Financial News canvassed London-based headhunters for their views on where the most hiring is taking place within the banking sector.
• Equity sales and trading
Headhunters report that there is heightened demand for cash equity sales and trading staff, while analysts are also in demand, in particular those focused on financial institutions and on the energy and natural resources sectors.
Morgan Stanley has added to its London-based equities business in recent months, with several senior hires in electronic trading and equity derivatives. The US bank retrenched heavily in late 2008 and has been rebuilding its teams to help grow its market share back to pre-crisis levels. Barclays Capital, HSBC, Jefferies and Nomura are also hiring in the equities business.
Other banks have looked to acquisitions to grow their market share in cash equities. This month Macquarie Group agreed a deal to acquire the cash equities business of German private bank Sal. Oppenheim. Under the agreement more than 50 staff will join Macquarie on completion of the transaction. This is in addition to more than 90 staff from Sal. Oppenheim’s equity derivatives and structured products business, which Macquarie acquired in a separate transaction last December.
• Fixed income sales and trading
Fixed income sales and trading staff continue to be in demand, after a strong 2009 for the sector. In particular, emerging markets and high yield sales and trading look set to benefit from increasing activity in the sector, said headhunters.
In January analysts at Citigroup forecasted a 5-10% rise in revenues from high yield trading for investment banks in 2010, as well as growth in distressed and structured credit. However, revenue growth in those areas is expected to be offset by weakness in investment grade and flow trading businesses, where revenues are expected to decline 20-30% on last year.
• Derivatives
There has been a slight uptick in demand for structured finance specialists, but interest is still some way off from the pre-crisis highs, while demand for derivatives staff is levelling off after a year of decreasing demand, according to headhunters.
• Commodities
After a stellar year last year, and expected further growth this year, hiring is set to continue in the commodities sector. Analysts at Citigroup forecasting the global commodities revenue pool for banks to grow 5-10% to $15bn (€10.9bn) this year.
Bank of America Merrill Lynch is looking to grow its London-based team, having added a number of staff in Asia last year, with the global heads having told headhunters to target any quality sector specialists that become available.
Other banks have increased headcounts via acquisitions. Nomura has sealed a deal for the European trading arm of Canadian oil company Nexen, while JP Morgan is close to a deal for the energy-trading business owned by Royal Bank of Scotland and Sempra Energy.
• M&A
Banks are looking to add mining, natural resources, utilities and financial institutions expertise to their M&A teams, with M&A analysts, associates and vice-presidents all in demand.
Bank of America Merrill Lynch is known to have searches out for bankers for its metals and mining, oil and gas, and its power and utilities teams, with executive chairman of global banking and markets, Andrea Orcel, looking to hire as many as 10 top dealmakers in Europe. BarCap is also looking to add more M&A bankers.
• Back office
There is demand for product control staff, specifically around equities and fixed income, and a significant amount of recruitment around operations, risk management and accounting. According to figures from eFinancialCareers, accounting and risk management account for the largest increase in jobs advertised year on year.