Students still want to be bankers - but are less impressed by top banks

Investment banking remains an appealing career in spite of the difficulties faced by the industry, a survey of students in the UK shows.

The poll by High Fliers Research of nearly 14,000 final-year students at leading universities found that 10.5% applied to investment banks in 2002, a slight drop on last year's figure of 10.8%.

There was some disenchantment with leading employers in the industry, however. Goldman Sachs fell from 5th place to 9th place in a list of the top 100 employers in the UK that graduates wanted to work for.

JP Morgan fell from 13th place to 21st place Morgan Stanley fell from 16th place to 24th and Merrill Lynch from 34th to 41st.

Martin Birchall of High Fliers Research said US banks suffered as a result of September 11th. The terrorist attacks led students to assume that there would be fewer jobs on offer.

Combined with high profile redundancies, he said this communicated a general message that numbers were down.

Not all investment banks performed badly, however. Birchall said two stood out as having done well in 2002: UBS Warburg and Deutsche Bank. UBS Warburg climbed from 24th to 17th place in the 100 best employers ranking, while Deutsche Bank climbed from 42nd place to 30th.

Birchall said both banks were more active in the milk round than in previous years. &quotThe battle for graduates is won and lost at universities,&quot he said. UBS Warburg also benefited from students' growing familiarity with its new name. The bank has been recruiting as UBS Warburg only for the past three years, before which it was known as SBC Warburg Dillon Read.

Citigroup and Credit Suisse First Boston also rose in the league table, but remained substantially behind other leading banks in the ranking.

CSFB offered its 2001 graduates 50% of their starting salary to defer taking up their place for a year, a move that hardly inspired confidence in the firm. Birchall said this seemed to have been outweighed by an increase in CSFB's activity on campus, which boosted its profile.

The consulting firm Accenture topped the ranking of firms that students wanted to work for. But applications to consultancy firms overall fell more steeply than those to investment banks.

&quotThis is good news for banks&quot, said Birchall. &quotIt means that they are getting a higher proportion of high quality graduates who want a City career.&quot

The survey also found that 61% of graduates plan to delay getting a job this year. Of these 22% plan to do further studies, the highest percentage since the survey began in 1995.

At the same time, graduate debts are soaring. The average debt for those graduating in 2002 was 9,100, up from 5,900 in 2001.

Rising debts may boost the appeal of investment banking careers. &quotConsulting and investment banking are the only sectors where you can expect to start on a salary of 35,000,&quot said Birchall.

On average, graduates expect to earn 18,700 for their first job.