Lots of interns, no full time job offers?
Maybe you're not so lucky after all if you got an internship at an investment bank this summer - especially if you're in fixed income trading.
Five banks have reported their second quarter results so far (JPMorgan, Citi, Bank of America, Goldman Sachs and Morgan Stanley). On average, revenues across their main investment banking business lines (equities trading, fixed income trading, M&A and capital markets) were down more than 6% in the first half of the year.
In divisions such as fixed income trading, the reduction is more dramatic: revenues fell more than 19% year- on- year in the first half. Even in strong areas like M&A (where revenues were up 37%), there's been a lot of work for nothing - at the start of July withdrawn M&A in Europe, the Middle East and Africa was at its highest level since 2008.
What does this mean for this summer's interns?
Very feasibly, far fewer full time job offers than is usually the case.
Last week, an apocryphal rumour did the rounds suggesting that UBS, which is expected to announce 5,000 redundancies later this week, has imposed a hiring freeze which will prevent it from placing interns who aren't yet in fixed positions. We understand this to be untrue, but such concerns seem inevitable in the circumstances.
In June, leading investment banks told the UK Association of Graduate Recruiters that they intended to hire around 1,100 full time graduates this year, amounting to 5.7% of the total. This is already a significant reduction on the recent past: in 2009, the AGR said investment banks accounted for 9.6% of total UK graduate hiring. But with revenues deteriorating, will banks now pull back even more - leaving this year's summer interns with no hope of a job offer?
The head of recruitment at one international bank in the City says this is unlikely and that they expect to make a similar proportion of interns offers this year as last. Goldman Sachs told us last week that it expects to make 70% of its interns offers and to still have places left for 2012 graduates who only apply in the autumn. Deutsche Bank regularly insists that it keeps its graduate pipeline stable, no matter what markets are like.
However, some US banks are understood to have significantly increased their intake of summer interns this year, and may now be regretting it. With redundancies replacing expansion, interns are advisable to establish which desks really are hiring. With plenty of fixed income desks already overstaffed, finding one in a position to make an offer is not going to be easy.