How safe is your front office job in an investment bank? The answer, for the moment, is probably 'pretty safe.' - A whole swathe of banks have promised not to make job cuts 'during the pandemic' and although Deutsche Bank has broken ranks and indicated that the pandemic is pretty over as far as layoffs are concerned, DB's 4,000 additional cuts outside Germany are most likely to hit technology and other infrastructure staff.
This doesn't mean, however, that front office jobs will be safe forever. SocGen has said that it will begin cutting again from September 2020 'at the earliest' and the fourth quarter is expected to see some heavy RiFs (reductions in force) across the industry.
The latest research from banking intelligence firm Tricumen highlights who's most at risk when the cuts eventually come. The charts below depict which banks were above and below the average in the first quarter when it came to front office employee productivity in equities sales and trading, fixed income currencies and commodities (FICC) sales and trading, and their investment banking divisions (IBD - M&A, equity capital markets and debt capital markets). The closer a dot is towards the middle of the chart, the worse the prognosis.
Of course, things might change for investment bankers and fixed income traders at SocGen, or for equities traders at BNP Paribas, and fixed income traders at Natwest Markets before the end of the year. There's still time to make amends.
What Tricumen's research suggests, however, is that the old rule of thumb still applies: if you work for a major U.S. bank you are generally far more productive than if you work for a rival European firm. This will matter as the year goes on and banks face rising credit writedowns and a need to cut costs.
Operating revenues/full time front office employees, Q1 2020 (Investment banking divisions)
Operating revenues/full time front office employees, Q1 2020 (fixed income trading divisions)
Operating revenues/full time front office employees, Q1 2020 (equities trading divisions)
Photo by Sasha Lebedeva on Unsplash
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