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12% drop in new City jobs despite revival of IPO market

12% drop in new City jobs despite revival of IPO market

Approximately 2,170 job vacancies in July, down 12% on June 2013

The number of new City jobs created dropped 12% in July 2013 to 2,172, down from 2,462 the month before, according to Astbury Marsden, a leading financial services recruitment firm. 

This figure is down 27% from July last year, when the number of new City jobs was approximately 2,980.

Astbury Marsden says that positive recent results from some banks, such as Credit Suisse which posted a sharp rise in its profits thanks to good results in advisory and underwriting activity, is fuelling renewed confidence.  However, this has not yet translated into an increase in new roles across the industry as regulators’ more stringent requirements on capital are making banks more cautious about expanding headcount.

However, although the overall recruitment picture is patchy, some banks are starting to make growth hires for the first time in many months. 

In particular, many banks are anticipating the continued recovery of the IPO market.  Europe’s IPO markets have gained strength in the second quarter of this year, with &euro5.2bn being raised in Q2, a 58% increase on the &euro3.3bn raised in the first quarter of the year.  Several banks are also reporting strong IPO pipelines for the rest of the year.

However, the regulatory pressure on banks to boost their balance sheets means that many banks have put recruitment on hold while they review their operations in order to focus only on the most profitable areas. 

Mark Cameron, Chief Operating Officer at Astbury Marsden, says: “Hopes for the IPO market are high at the moment as the economic recovery seems to be gaining momentum.” 

“In the past this would have resulted in substantial hiring – as renewed appetite for new issues feeds into other activity.  However, in the current regulatory environment many banks are still wary about committing to expansion.”

Astbury Marsden explains that the continually evolving regulatory environment has led to important shifts in banks’ non-client facing hiring strategies.  

Adds Mark Cameron: “Internal strategy consultants and regulatory experts are still strongly in demand.  Banks are listening to the sabre-rattling from the FCA, most recently about an increase in enforcement activity around anti-money laundering requirements and are staffing up accordingly.  Meanwhile, there is a new regulation to grapple with including AIFMD and MiFID II.”

“Additionally with the new capital constraints being demanded by the Bank of England and PRA, banks are putting significant resource into planning which areas of their business are going to be most profitable, and where they should best focus resource.”

“One of the early outcomes of these cost-trimming exercises is cutting back on contract hires in specialist technical and professional areas.  At the moment there are more permanent roles in areas like technology, or product control positions that require finance qualifications than there are contract roles, and many staff who had enjoyed the freedom and potentially bigger rewards of contract work are now prepared to take permanent jobs.”


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