Good news all round
Barclays Capital isn't about to eliminate the staff it's hoovered up under Diamond. And financial services jobs across the industry are up 20% on 2006.
Diamond's dynamite
Trouncing rumours that something nasty was afoot at its investment banking arm, Barclays revealed today that this is not the case at all: it isn't writing down 10bn of debt, it's writing down 1.3bn. No one needs to resign. And year to date profits at Bar Cap are actually ahead of last year.
Chief exec Bob Diamond is even predicting pleasant things for leveraged financiers - he told the Financial Times that the "optimist in me" thinks leveraged finance will recover in 1Q08.
Is Diamond's internal optimist running amok? The backlog on leveaged loans still amounts to $117bn and according to the FT bankers at yesterday's European High Yield conference said leveraged finance and high yield loan markets won't recover until the middle of 2008 at the earliest.
But Bob may not be the only one permitting himself a moment of exuberance. Putting aside HSBC's revelation that credit quality is deteriorating across the board, it's been a better week for banks generally. US bank stocks rose 5% on Tuesday, Goldman insists that it isn't secretly sitting on something smelly, B of A's gained $30bn on an investment in China, and John Thain has got off the fence and gone to Merrill.
Today's announcement doesn't mean, however, that Bar Cap bankers are safe. Some may still feel Diamond's hard edge. John Raymond, an analyst at research firm Creditsights, says a 'reallocation' [of staff] is on the cards: "They are clearly building in commodities, and areas like equities have been doing well. But there's obviously a big question over structured credit, asset backed securities and CDOs."
Lots more jobs
So long as ditched staff don't particularly want to carry on working in ABS, structured credit or anywhere in fixed income, those handed black bin bags may find it easy to locate a new home.
Middle and back office recruitment firm Morgan McKinley's latest London Employment Monitor says new financial services jobs in October were up 20% on last year and there were nearly 700 more jobs in London than there were candidates.
