Study suggests huge bonuses coming in ECM. Inexplicable increase in people searching for jobs in banking

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Given that summer's not even over it may seem a little crass to start speculating about bonuses for 2013. If you want to read summer stories, try clicking here instead. However, if you're not averse to early bonus speculation, you may be interested in a new research note issued by banking intelligence company Tricumen.

Tricumen has looked at banks' results for the first half of 2013 and assembled the charts below depicting operating revenues per head for different businesses over the period. Revenues per head vary widely by business area. Some businesses have done incredibly well compared to last year; others really haven't.

Operating revenues per head don't tell the full story. Business areas like fixed income currencies and commodities (FICC) generate huge revenues per head, but require substantial amounts of capital which erodes their profitability. Business areas like M&A generate minimal revenues per head, but require almost no capital commitment.

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Nonetheless, the year-on-year change in operating revenues per head can be read as an indicator of the direction bonuses will move in this year. It's also a predictor of future hiring (or firing). On this basis, it looks like equity capital markets (ECM) bankers are in line for big bonuses in 2013 and that ECM roles will be top of banks' shopping lists for the remainder of of this year. Equity sales and trading jobs look hot too. Credit, FX and commodities don't look too bad. The only weak spot seems to be rates - banks' biggest business area. As revenues per head fall in rates businesses, rates bonus pools are likely to fall too. Banks will need that money to reward higher performing staff elsewhere.

Revenues per head, primary issuance and advisory

[caption id="attachment_148856" align="alignnone" width="544"]Tricumen revenues per head in primary issuance and advisory 2012-2013 Tricumen revenues per head in primary issuance and advisory 2012-2013[/caption]

Revenues per head, FICC

[caption id="attachment_148857" align="alignnone" width="551"]Tricumen revenues per head in FICC Tricumen revenues per head in FICC[/caption]

Revenues per head, equities

[caption id="attachment_148858" align="alignnone" width="562"]Tricumen revenues per head in equities Tricumen revenues per head in equities[/caption]

Return of the people looking for jobs in banks 

Separately, something exciting is happening in terms of general interest in banking jobs.

For years, the number of people pursuing banking jobs in London has been in steep decline.  From a high of 15,700 in June-2011 to a low of 3,700 in September 2012, the number of banking jobseekers declined 77% in 14 months according to recruitment firm Morgan McKinley. Interest in banking jobs remained low in the early months of 2013, when Morgan McKinley's figures suggested there were 20,000 fewer banking jobseekers than during the same period of 2011.

Suddenly, however, things are changing. New figures from Morgan McKinley suggest the number of people looking for jobs in banking has increased consistently every month since May 2013. It thinks there were 7,800 people looking for banking jobs in London this July, up from 4,800 in July 2012.    

The resurgent banking jobseeker is good news. It suggests renewed confidence and increased willingness to risk moving to a new role. As staff turnover increases, replacement hiring will increase and banking recruitment will be resurgent too.

The only bad news is that the creation of new banking jobs hasn't kept pace with the emergence of all the new jobseekers: banking jobs fell 37% year-on-year in July according to Morgan McKinley. Nor do the new jobs seem entirely exciting: they're mostly for accountants, regulatory reporting specialists and 'project change specialists' who know about regulatory initiatives.