Weak profits set to hinder City hiring
This warning comes as accountancy firm KPMG has announced that Britain’s five largest banking groups must work harder to become more profitable.
KPMG’s annual UK bank benchmarking report, which covers Lloyds, Barclays, HSBC, Royal Bank of Scotland and Standard Chartered, found that value for shareholders is still being eroded six years after the financial crisis. Furthermore, a second study by Deloitte Real Estate has found that banks’ share of office space in London has shrunk by 13 per cent over the past decade as the industry struggles with heavy job losses in the wake of the financial crisis.
Commenting on current market conditions, Robert Bowyer, Director at Venn Group comments
“KPMG’s report that all of the City’s big five banks achieved profits less than eight per cent last year - compared with an average of 11.6 per cent in 2009 – is unwelcome news for the Financial Services sector. Banks are being held to greater account for their conduct and face increasing cost pressures under tighter regulation. This will inevitably have an impact on permanent hiring as financial institutions look at reducing headcount cost as a means of improving returns for shareholders. However, our analysis shows that any freeze on permanent hiring is likely to increase demand for contractors as organisations seek to plug gaps to maintain efficiency levels. ”
“Although there has been a dip in overall vacancy levels in recent months, this new landscape has created a spike in demand for Structured Finance Division (SFD) specialists - particularly those with experience in EMG business management systems - who can help organisations to manage risk and return by navigating the complex legislative parameters. The Financial Services sector continues to be the biggest occupier of City office space, and although established banking groups may be tightening their belts, an increase in investment management and advisory firms is creating demand for specialists to work in these areas.”