Source: Financial Times, published on 26 February 2018
Europe’s top four investment banks have begun to increase staff numbers for the first time since 2015 to capitalise on improving market conditions after years of restructuring.
Credit Suisse, Deutsche Bank and UBS boosted staffing in the second half of 2017, their full-year results show. Barclays, which reports staff numbers only annually, also increased headcount in 2017, excluding the impact of the sale of its Africa business.
The increase suggests the tide is turning for Europe’s top investment banks, which cut about 12,000 jobs in 2016. Credit Suisse, Deutsche and Barclays made lay-offs under restructuring programmes as European investment banks steadily lost share to their US rivals.
Credit Suisse and Barclays have said they are renewing the focus on investment in their businesses. Expected interest rate rises in the US and UK are helping banks, as is a recent return of market volatility, which encourages clients to hedge and trade.
Tidjane Thiam, Credit Suisse’s chief executive, said at the bank’s fourth-quarter earnings that it had “invested materially” to develop its equities franchise. In November, Mr Thiam said the number of managing directors in Credit Suisse’s investment banking division was up 8 per cent since 2015.
The headcount increases are modest; Credit Suisse, Deutsche Bank and UBS collectively added about 3,000 jobs in the second half of 2017, and Barclays 2,500 in 2017, excluding Africa. The four together employed 285,500 at the end of 2017. All four banks declined to comment.
Credit Suisse’s group-wide headcount fell for five of the six quarters between the end 2015 and mid-2016, before expanding in the third and fourth quarters of 2017, analysis by the Financial Times shows.
At Barclays, executives have spoken about adding resources to its UK investment bank as well as its international private bank, in contrast to the broad hiring freeze that Jes Staley, chief executive, imposed when he joined the bank in late 2015.
Falls in Barclays’ headcount have been relatively muted since Mr Staley took over, excluding the Africa disposal which took about 42,000 employees off the payroll. Barclays cut 100 jobs in its UK investment bank this year but sources described those cuts as “normal pruning” rather than a strategic shift. Barclays also hired 40 managing directors in 2017, more than half of them for its markets division.
Deutsche Bank’s headcount fell for five consecutive quarters before it began expanding in the third quarter of 2017. A person familiar with the bank’s strategy said the recent growth reflected the “insourcing” of staff who had previously worked as contractors.
The bank’s headcount is not expected to continue to expand; Deutsche is set to lay off up to 500 investment bank staff before its March bonus payment date and has warned of big job cuts in administration as it improves its technology.
UBS made its cuts earlier in the financial crisis and headcount has been up and down over the past few years, in line with business conditions and market opportunities.
Darren Burns, operations director at recruiter Morgan McKinley, said some European banks had a “massive spurt” in hiring in the second half of last year, which he attributed in part to under-hiring earlier in the year.
Key areas in back-to-mid office recruitment were governance, IT and audit. Mr Burns said that the hiring spurt had not persisted into 2018.
“A lot of positions have been put on hold in the first quarter,” he said, adding that he was expecting US banks to outhire European banks in the UK this year.
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