Fixed income staff required in Germany

John Jessen, of the Frankfurt-based headhunter Smith & Jessen, said all large banks operating in Germany are boosting their fixed income sales and trading teams, with credit derivatives specialists particularly sought after.

UBS Warburg, CSFB, Citigroup and Morgan Stanley are among those currently hiring, said Jessen.

Henrik Jasper, managing director of Banking Consult, a rival Frankfurt firm, said there was demand for fixed income derivatives salespeople who have strong relationships with institutional purchasers such as insurance companies. About 10 banks are planning to hire senior individuals with this profile, Jasper said.

Andreas Weig, head of financial services recruitment at Korn/Ferry in Germany said banks were increasingly choosy when selecting new hires, however. 'Everyone is looking for new staff in fixed income. They are restructuring existing teams and looking to bring in one strong person to replace two weak ones.'

Weig said fixed income hiring in Germany was due only to the strength of the fixed income market. However, Jessen said hiring reflected foreign banks' commitment to Germany: 'Germany is Europe's largest economy and Frankfurt is Europe's second largest financial centre. A real battle is beginning to take place here for market share.'

As foreign banks build fixed income teams, Jessen said domestic German banks were responding by making defensive hires. DZ Bank and Trinkaus & Burkardt were on the lookout for new fixed income staff.

However, demand for fixed income staff has done little to improve pay. Bankers in Germany continue to be paid substantially less than their colleagues in London.

Figures from Korn/Ferry showed that a junior fixed income derivatives trader working in London could expect to earn a total package of between $250,000 (€226,000) and $300,000. A junior trader in Frankfurt earns no more than €160,000.

The discrepancy in pay also persists for more senior hires. A team member working in fixed income derivative trading in London will earn a total of between $400,000 and $750,000, reports Kornferry; in Frankfurt the same person will earn a maximum of €300,000 euros.

Meanwhile a head of fixed income trading based in London can earn up to $1.5m, compared to €700,000 in Frankfurt.

Weig said the gap was unlikely to close.