Investment banks added 42% fewer staff in the second quarter of 2011, but this is where Credit Suisse suggests there could be hiring next
Credit Suisse's second quarter results are out today. As predicted, it is in indeed cutting 2,000 people. It has also reduced its overall investment banking compensation bill by 40% quarter-on-quarter and cut compensation per head in the investment bank 14% year-on-year in the first half.
A brief look at the results of all the banks that break out headcount (Goldman Sachs, JPMorgan, Deutsche, Credit Suisse and UBS), underscores the extent to which hiring in investment banking businesses has declined in the second quarter of 2011.
In the second quarter of 2010, the combined banks increased their investment banking headcount by 3,283 people. In the second quarter of 2011, they increased it by 1,915. The biggest reduction in hiring came at Goldman Sachs (whose figures also include asset management headcount). In Q210, it added 1,000 people. In Q211, it added 100.
Credit Suisse has increased its investment banking headcount by 600 people in the past quarter. However, this was mostly due to the acquisition of ABN AMRO's hedge fund administration business, rather than hiring.
Where will headcount additions happen next? As usual, Credit Suisse has produced a bubble chart depicting market conditions and where it thinks the upside lies. We've reproduced this below (click to enlarge). It seems to suggest that Credit Suisse, at least, might want more people in securitisation and leveraged finance.
