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The JPMorgan charts explaining why banks aren’t hiring again, yet

Banks may not be firing juniors with the zeal of last year, but they’re not hiring much either. As we reported yesterday, there are “pockets” of activity in the investment banking recruitment market, but things are still quiet. Recruiters are waiting. And hoping.

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Anyone wondering why hiring hasn’t returned may want to have a long look at some charts produced a couple of months ago by JPMorgan’s European banking analysts. Shown below, they depict investment banking division (M&A, ECM and DCM) revenues by quarter, versus the average, dating back to 2012.

After the halcyon dealmaking days of the pandemic, investment banking division (IBD) revenues have been below their long term trend since late 2022. That hasn't changed. Even if banks hadn’t staffed-up to handle the pandemic bump, they probably wouldn’t need a lot of new investment banking talent.

The recent revenue discrepancy is particularly extreme in equity capital markets (ECM), and is less notable in M&A. In debt capital markets (DCM) revenues are actually above their long term average, but as one DCM headhunter tells us, there’s hesitation about adding DCM talent because of the challenge from private credit: “There are a few things going on at third tier platforms but most banks are still in hiring freeze mode,” he says.

When will hiring return? Maybe once revenues remain above the long term trend for multiple quarters. However, as the other charts from JPMorgan show below, banks came out of 2023 with above average headcount on a historic basis – revenues need to justify current staff numbers before they sanction growing again.'

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Photo by Rob Wicks on Unsplash

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AUTHORSarah Butcher Global Editor

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