Citigroup's announcement it will hire hundreds of bankers in Europe could be a sign that the mega-bank has finally righted its ship after years of asset sales and cost cutting. Recruiters say that means the bank is in a growth mode and seeking regain its swagger.
While the news is good for Citigroup, it may be part of a broader trend. "We're seeing significant hiring in investment banking across the major institutions," says Alan Guarino, global sector leader of fintech and electronic trading at Korn Ferry International. "It's clear that the broader economy and M&A activity are heating up."
Guarino said that while banks are filling roles in areas based on specific needs, there's one common theme: Hiring is robust in Europe and Asia. As part of its expansion in the capital markets business in Europe, Citigroup plans to hire in areas like debt and equities. The bank will also triple its size in China, increasing its workforce to 12,000 people over the next three years.
Growth a Top Priority
A spokesman for Citigroup says growth is a top priority at the bank. "We have reduced our overall expense base dramatically in recent years while refocusing the company. We are now ramping up investment in our core businesses, including markets and banking."
That's certainly a reversal. "Citigroup certainly was in an internal-facing mode for past few years, fixing balance sheet issues, integrating businesses and stabilizing the franchise," says Jeff Harte, an analyst at Sandler O'Neill. "We're seeing the bank become more outward focused, and investing in growth aggressively."
Although the bank may grow in the U.S. in areas such as middle-market lending, Harte believes that most of its growth lies overseas. "The theme at Citigroup seems to be making our international franchise bigger," he says.
And despite traditional lulls this time of year due to banks' unwillingness to buyout bonuses for newly hired bankers, firms are recruiting to position themselves for next year. Some will do so by structuring packages where effective start dates follow bonus payouts. In the case of Citigroup, hiring is needed to replace bankers downsized during lean years. Industry-wide, bankers are in demand in areas such as technology, media and financial institutions.
According to a recruiter who places investment bankers, "It bodes well for Citigroup given that there has been an inordinate focus on working through a crisis over the past few years." "Its a combination of Vikram having things figured out and the belief that we won't see a double dip." "He realizes that he needs people on the Street who have the relationships and can placate large corporations or else he won't get the deals."