City hiring remains static as strong equity markets offset slowdown in FICC trading
Astbury Marsden says 2,580 new jobs were created in the City in August compared to 2,670 in July. There was a marginal increase in the number of new jobs compared to the same time last year, increasing by 4% from the 2,490 new roles created in August 2013.
Astbury Marsden explains that City hiring activity remained static in August (traditionally one of the weakest months for hiring), with hiring in equities trading and corporate finance at the investment banks offsetting a fall in Fixed Income Currencies and Commodities activity. A post-summer surge in IPO and M&A activity is also expected to boost hiring, as the banks fight to get a new crop of deals across the line.
Simon Leveson, Senior Consultant at Astbury Marsden, adds: “Hiring activity in the City was static in August as a strong equities market offset a slowdown in Fixed Incomes Currencies and Commodities trading.”
“After the summer lull, we expect to see the IPO market heat up again and lead to increased hiring in equities trading and corporate finance departments. 2014 has been far the busiest year for IPO activity since the credit crunch.”
“The banks and brokerage houses are likely to see more work come through the door as companies look to join the latest IPO rush.”
Astbury Marsden adds that City hiring activity has been partly held back by a drop off in revenue from Fixed Income Currencies and Commodities (FICC) operations at the large investment banks. Revenue from FICC trading fell by 13% in the first half of 2014, while earnings from foreign exchange trading at the investment banks fell at the fastest rate since the financial crisis (35%).*
Astbury Marsden says that increased regulatory capital requirements has hit FICC trading hard, with the investment banks finding it harder to remain as profitable in this area.
Simon Leveson adds: “The investment banks continued to trim their FICC-oriented sales and trading in favour of more reliable income generators.”
“The profitability of these teams has been squeezed by the stricter capital requirements, making it more expensive for banks to hold large levels of corporate bonds and other assets on their balance sheets.”
“Investment banks have been hit particularly hard by the reduction in foreign exchange trading, which has been caused by a lack of volatility and low volumes.”
“Some firms have had to make significant cuts in staff in order to reduce their cost income ratio and to boost profits.”
*Research from data firm, Coalition