Morning Coffee: Where to find 100k new banking jobs in the UK. Bob Diamond speaks on Barclays' future
You would never have guessed it from all the talk about imminent redundancies, but banking jobs in Britain are thriving. Or at least, they have been. Or at least they have been in theory. 100,000 new UK finance positions have been created in the past two years according to a report in the Financial Times emanating from TheCityUK, a lobby group for the financial services industry. Ever-upbeat, TheCityUK (TCU) thinks the pace of expansion is now slowing, but not stopping: another 100,000 finance jobs will be created in Britain over the next six years (regulatory pleasantness permitting).
Needless to say most of the UK's finance jobs are in the City of London. In total, TCU thinks 2m people work in financial services and related industries in Britain and that 657,000 of them are in the City. Another 73,000 are in Edinburgh, 50,000 are in Birmingham. 47,600 are in Manchester. 42,000 are in Leeds and 37,400 are in Glasgow. Edinburgh is the home of the asset management industry, but it's also been boosted by asset servicing jobs created by BlackRock and State Street. Birmingham has Deutsche Bank's back office (and some of its 'low touch' trading operations). Leeds has the back office bits of Santander and First Direct; KPMG is building a big new technology centre there. RBS is creating new jobs in Manchester. Chester has some of the non-revenue generating functions of Bank of America.
Not all of these jobs are well paid. This may be why TCU doesn't put an average salary figure on them. Instead, it says the average finance job in the UK contributes £84k in economic growth. That's apparently twice the national average. TCU says finance jobs are a good thing and that regulators should treat banks kindly to facilitate their growth. If this sounds like the rallying cry of a lobby group, that's hardly surprising is it?
Separately, Bob Diamond has been on Bloomberg TV. Despite insisting that he had no intention of talking about the perilous situation that Barclays investment bank finds itself in, Bob found himself doing precisely that. Can Barclays really compete with Wall Street banks like Goldman Sachs and JPMorgan which are less fettered by public opinion and European regulations? Bob thinks it can, probably. "Time will tell," he said, cryptically, "But I think the answer is yes. Barclays' footprint is a top tier footprint." Barclays is strong across investment banking and asset management, said Bob. It's worse for RBS, he added.
Diamond also thinks that large investment banks are great places to be. Since 2008 there have been greater opportunities for small entrepreneurial finance operations, says Bob, but the big investment banks are here to stay. "I can guarantee you that investment banking as an industry will be robust for decades," he told Bloomberg's interviewers, adding that anyone thinking of joining the industry just needs to weigh this against the effects of new regulations, which are encouraging banks (like Barclays) to pull back from areas that are no longer profitable (like commodities).
Ex-head of Cazenove says banking executives should not be bulled into believing the death spiral: "My predecessor was told that the very survival of our 200-year-old firm was dependent on the continued employment of a 20-something individual who had been in the industry for about 18 months. We offered him a partnership but he left anyway. A few years later, I reminded my senior management team of this incident and none of us, myself included, could remember his name. (Financial Times)
This was not the first time Robert Pickering has written to the Financial Times. (Guardian)
Rich Herman, co-head of fixed income sales and trading at Deutsche Bank, says the bank will stay committed to the business. “There is little you can do about the cyclical challenges, you just have to ride it out, but the real challenge is to figure out what isn’t coming back.” (IFRE)
Kevin Rodgers, head of FX at Deutsche Bank is retiring to spend more time with his family. (WSJ)
Bank of America shares fell 6% yesterday following an accounting mistake. (BBC)
The mind does not belong in a cubicle. (The Atlantic)
Financial Times advice for healthy executives from 1957: never fly both ways on a business trip. (Financial Times)
No one can afford to go to Wimbledon this year. (Bloomberg)