global recruitment specialists
Corporate Banking Market Overview
A year in review…
Throughout 2013 we have seen a continued focus on retaining and attracting strong talent in commercial banking, although the expectation is that salary and bonus pool will continue to reduce in the sector in the New Year. The reality is that the Commercial Banking market has not had a good year, with margins compressing as a result of QE3 and acceleration of liquidity and capital measures brought about by Basel III, Dodd-Frank etc.
Looking forward, banks will need to add capital, reduce cost and generate the right kind of liquidity which will have a knock on effect on salaries and total compensation, as banks try to compete and increase returns from low levels. Rising interest rates post 2015 may provide some relief, but the trend is around gross reduction which may lead to greater differentiation as banks try and retain the top talent.
The Investment Banking market has seen a very volatile 2013. Performance in equity markets has been mixed but Japan has performed well and the improvement in the US market has impacted positively. Fixed Income has performed steadily throughout the year. Most banks have taken the opportunity to downsize and restructure to reduce costs as well as looking for ways to offshore work to cheaper locations. Generally the industry doesn't know what will happen in the future so as a result they are cautious with investment and planned growth.
Talent pool vs. demand…
As the sales force shrinks, demand for middle and back office staff is diminishing. On the other hand, significant increases in both local and international regulatory requirements in recent years mean that there will be a growing demand for candidates with strong compliance, risk and regulatory backgrounds in 2014. Those with Mandarin language skills are particularly sought after.
Whilst there will always be a demand for good performing front office staff in private and corporate banking, as banks restructure we are likely to see a lot of excess supply of candidates from investment banking. However, there has been a shortage of executive roles in the market due to a reduced appetite for hiring. Many banks who are restructuring are instead trying to redeploy existing staff before hiring externally.
The year ahead…
Within the Corporate and Investment Banking sectors we expect to see a similar year to 2013, with limited and cautious hiring activity. However, with global markets uncertain, there will be strong demand in areas such as credit risk and capital management with regulatory changes such as Basel III. There will also be strong demand for candidates with specialist equities experience.
Generally the Asian market is feeling relatively positive with growth in China still increasing, albeit at a slower rate. However, there is also uncertainty caused by many external factors that could affect the market such as the US and European economies. One positive sign however is a slowly growing increase in mergers and acquisitions.
Candidates need to show stability and demonstrate how they can positively contribute to an organisation. Those that communicate to a high level, in addition to strong technical skills, will find themselves with no shortage of job opportunities. Bi-lingual Chinese speakers will have a big advantage with the continued growth of business in mainland China.
For businesses finding the best talent is going to be competitive. Hiring managers must make sure that the recruitment process is fast and efficient. Companies should differentiate themselves from competitors by allowing key recruitment partners access to business line managers, so that greater exposure for the brand is delivered effectively to potential candidates.