Banks are planning further rounds of redundancies before bonuses are paid

If you've survived this long, you might be feeling pretty secure. That could be a mistake. Banks have a big overhang of costs to cut from last year, and recruiters in London say they're preparing to make additional rounds of redundancies before bonuses are paid.

Credit Suisse is going to make another round of layoffs in fixed income this week or next, according to fixed income recruiters. The Swiss bank, which is cutting 30% of London headcount, cut around 100 jobs in London in November. Recruiters say those cuts mostly affected the macro business, whereas the coming Credit Suisse cuts will be focused in credit. Deutsche is also expected to make some of its planned fixed income layoffs in the coming weeks. And BNP Paribas is expected to set about tackling its cost income ratio - which J.P. Morgan puts at 86% for 2015 - by cutting across sales and trading.

The real question though, is whether banks will now lay people off in equities. 2016 hasn't started well for equities professionals, with Chinese markets plummeting and the FTSE and Dow Jones Industrial average having their worst starts to the year for a decade or more. Equities sales and trading headcount at major banks fell just 1% in the first nine months of 2015, according to data firm Coalition. Could 2016 be the year this all changes?

London headhunters say there have already been some cuts in equities this year. Exane is understood to have made a handful of cuts from equity research, sales and trading. RBC Capital Markets let go of several equity research analysts at the end of last year, including Jonathan Guy who joined Numis as a director earlier this month and Tim Huff, a researcher specializing in metals and mining who has yet to resurface.

Some equities headhunters are sanguine about 2016, however. Oliver Rolfe at search firm Spartan Partnership says banks in London already “refocused” their equities teams last year in preparation for the introduction of MiFID II. This has now been delayed until 2018, so the pressure is off. “You’ll always get some cuts, but in cash equities they won’t be big. Banks will trim under-performers or will right-size in sectors where there isn’t much activity, only to hire there again when things pick up,” says Rolfe.

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