It has begun. After years in which junior investment bankers were as hot as jalapeño peppers, the market has turned. Investment banking division (IBD) recruiters in London say analysts and associates from banks' M&A and capital markets divisions are starting to appear on the market.
"There are suddenly a lot of candidates around," says the head of one London recruitment company, speaking on condition of anonymity. "Most of them are analysts and associates. They've been let go, although they don't always make that very clear when they approach us."
UBS is said to have cut several junior members from its M&A generalist team. Barclays is also said by recruiters to have let go of analysts and associates "across various teams" as part of Jes Staley's mission to cut another 1,000 jobs from the investment bank. And Standard Chartered is said to have made heavy cuts in M&A after initial cuts to the London energy team last year.
Barclays declined to comment. UBS didn't respond to a request for information. And Standard Chartered said it's making 15,000 layoffs across the entire bank between now and 2018.
Intimations that the IBD hiring market has turned follows data from Dealogic suggesting that European investment banking fees fell to their lowest level since 2003 in the 36 days to February 5th. "It's the annual pre-bonus clear-out at European banks," said another M&A recruiter in London. "It's just a bit heavier than usual because last year was so awful. "
While US banks had a strong year for M&A in 2015, European banks didn't. Revenues in UBS's M&A business declined 7% last year. Only Credit Suisse bucked the trend, with a 21% increase - mostly due to its comparative strength in the North American market.
The UK's Financial Conduct Authority register offers some indication of the IBD professionals who've left banks in London this year. Jonathan Hubbard, a director in debt capital markets at Standard Chartered, is no longer registered. Neither are Daniel Aronov, an analyst in Barclays' financial sponsors group, and Shuang Zheng, an analyst in Barclays' TMT group. Geoff Smailes, a managing director in IBD at Barclays who was accused last month of firing a colleague in order to benefit from his bonus, is also no longer registered with the UK bank.
"My worry is that the whole thing might go pop and you'll suddenly have a load of people in IBD let go all at once," says the head of the recruitment firm. "There's very little hiring - only the boutiques are in the market right now."
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