Fewer students apply to investment banks

Getting a foot in the door of investment banking can be hard these days. Some banks are looking for up to 30% fewer graduates in 2002 than in 2001.

But prospective candidates have at least one thing in their favour: applications are also down.

Several banks say that they have received fewer applications this year. At Morgan Stanley, applications for 2002 intern and graduate positions are down on 2001. At JP Morgan, applications for this year's graduate positions are down by 20%. At Deutsche Bank, there has been a reduction in applications for internships this summer.

Redundancies in the industry are thought to be deterring students. Vivienne Dykstra, head of graduate recruitment at Deutsche Bank said: &quotDespite the fact that we at Deutsche Bank are still hiring aggressively, people are put off by the volatility of the industry. There is a degree of scepticism on campus. Students regard investment banks as firing instead of hiring.&quot

Some areas have been worse affected than others. Both JP Morgan and Morgan Stanley have noticed reduced interest in corporate finance and M&A, where redundancies have been high. &quotWe have seen the emphasis shift this year from Corporate Finance to Fixed Income and Institutional Equities, which indicates that students are fully up to speed with what is going on in the markets,&quot said Rebecca Neale, head of graduate recruitment at Morgan Stanley.

Surprisingly, given the negative publicity received by equities analysts in the wake of the dotcom slump, Neale said that Equity Research had also seen a surge in popularity this year.

JP Morgan's fall in applications may be partly the result of attempts to dissuade inappropriate applicants. The bank has posted a copy of one of the numeracy tests used to assess candidates on its website. As a result, although applications are down, the quality of applicants is said to have increased.

Some organisations appear more popular than others. Derek Walker, head of graduate recruitment at Merrill Lynch, said that after a 75% increase between 2000 and 2001, applications for summer and full time positions had remained steady this year. &quotPeople are still applying to the main players,&quot he says.