The Bear Stearns effect
Are things about to get ugly for anyone hoping to join an investment bank as a graduate trainee or intern this summer?
The rapid demise of Bear Stearns, which went from being worth $67 a share two weeks ago, to $2 a share last week and then back up to $10 a share this week (see the New York Times for the full story), doesn't make great reading if you're hoping to inveigle your way into investment banking after leaving university.
Fortunately, Bear Stearns wasn't a huge hirer of graduates in Europe - but then again, neither was it exactly a non-entity. According to adverts placed by Bear and to its own website, it was planning to hire 100+ students in Europe this year, across equity research, finance, fixed income, IT, institutional equities, investment banking, operations and prime brokerage.
What will happen to all those hopefuls now Bear's been acquired by JPMorgan at a knock-down price? A London-based graduate recruiter at the bank says it's no longer actively recruiting and that anyone who's received an offer already may yet be considered by JPMorgan.
Harder to convert an internship?
In the meantime, is the harsher banking environment likely to make it any more difficult to convert an internship into a full-time place this summer?
In normal circumstances, banks make full-time offers for the following year to anything from 60% (Citigroup) to 80% (Deutsche Bank) of their summer interns.
However, given that banks decided how many summer interns to hire back in January and conditions have deteriorated further since then, it might seem fair to assume that 2008 summer intern classes will be disproportionately large compared to the number of graduate hires banks need for 2009.
The good news is that most banks deny this and say it's far too early to tell how many people they'll be hiring in 2009 in any case. "The starting date for the 2009 programme is still 18 months away and we won't confirm numbers for some months yet," says Brian Hood, head of graduate recruitment at Citi.
"There will still be jobs for this year's interns and there won't be huge
swings in graduate numbers at DB," reiterates SallyAnn Birchall at Deutsche
Bank. "Graduate hiring is a long-term strategy. To cut costs now will only
mean increased investment at a later date, in addition to potential loss of
competitive advantage."
