Aussie i-banking hiring is now in a fairly serious slump
If you want a job at an investment bank in Australia, you should probably have made the move earlier this year. With deal volumes falling, firms are pegging back their recruitment as they take stock of their headcount needs.
Dealogic figures for the first nine months this year show takeover activity down 31 per cent to $US75.3bn ($77.9bn) and that number is inflated by the $US58bn BHP-RIO joint venture, which is unlikely to happen. ECM activity has fallen 70 per cent to $US13.6bn, making it the quietest period since 2003.
While this slump has not triggered GFC-style mass layoffs, almost all the major investment banks have imposed near-freezes on headcounts in the past two to three months, and are typically only hiring for essential replacement roles, says Michael Notley, director, Taurus Financial Recruitment.
"The banks hired aggressively in the first half of the year in anticipation of deals growth which did not eventuate. They thought there would be more M&A and IPO activity, but that hasn't happened," he adds.
Banks fire blanks
Important deals, such as NAB's blocked merger with Axa Asia Pacific, have fallen through, leaving i-banks with dwindling revenues and less desire to take on new staff. "One senior banker described it to me as the worst year of fund raising he's seen in the last seven years," says Notley.
The likes of Credit Suisse, JP Morgan, Goldman Sachs and Morgan Stanley, have all effectively "shut up shop", comments another headhunter, who asked not to be named. "To some extent they over hired earlier this year, so it's logical to be more conservative now."
He says Bank of America Merrill Lynch, which has been expanding in Australia since mid 2009, is now expected to cut between five and 10 people "at any level" here as part of a wider global cull. "It's trying to protect its bonus pool by trimming a few underperformers, but the layoffs shouldn't be too huge."
Macquarie, which lost some bankers after paying comparatively low mid-year bonuses, "appears to be trimming down via natural attrition and is comfortable to get rid of more fat from its teams," says the anonymous recruiter.
And even Barclays Capital, Nomura and Moelis, the darlings of 2010 investment banking employment growth, are not hiring as heavily as they were.
A bore in Q4
Unsurprisingly given the state of the market, the current quarter is not a great time to be searching for investment banking work, especially if you've just been made redundant. Not only are vacancy volumes down, but (rightly or wrongly) employers and recruiters will probably assume that recently retrenched bankers are underperformers, says Notley.
"And even if you're in a job, unless you're a proven superstar, it's hard to get poached because cost-conscious banks will be reluctant to buy you out of your bonus this late into the calendar year," he adds.
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