Investment banks' trading teams hop on the optimistic hiring bus

In the summer of 2013: while all talk of an increase in financial services recruitment was dominating the headlines, investment banks’ trading desks had to be content with the fact they were no longer being cut as aggressively.

Now, with 15,000 new financial services jobs expected to be created in the UK over the next three months (up from 10,000 in Q4 2013), this optimism has finally found the securities industry. A balance of 67% of securities firms polled for the CBI/PwC quarterly Financial Services Survey, said that they increased headcount in the three months to December, and 50% said they would do so in Q1 2014.

This is the strongest growth since mid-2010.However, overall employment in the UK financial services industry is still 52,000 lower than in 2008.

Even better, for the first time in many months, the main driver of recruitment within the UK’s financial services industry was an increase in demand for services, rather than regulatory pressure that has forced firms to staff up in recent years.

The banking sector, which also includes retail banks, is expected to rise at the fastest rate since the heady days of 2005, suggests the survey, with a balance of 55% of firms saying they would hire in the coming quarter.

Despite this, in the investment banking sector the ever-present threat of fundamental restructuring remains, with analysts predicting more firms pulling out of certain business areas altogether and focusing on their strengths. So far, UBS, which has curtailed some elements of its fixed income business, and Credit Suisse, which is pulling back from rates trading, have bitten the bullet.

Overall a balance of 39% of financial services firms increased headcount in the final quarter of 2013, making it the best three months since Q1 2007.

The asset management sector, however, remains among the most optimistic about its prospects and has been performing, as the results from Morgan Stanley, JPMorgan and Goldman Sachs demonstrate.

“Investment managers were in a dominant position at the end of 2013, and remained more optimistic than we’ve previously seen. Rising equity markets, higher fee incomes and increased profitability are all contributing factors to the bullish confidence that volumes and revenues will continue to grow over the next quarter,” said Paula Smith, PwC’s asset management leader.