Bankster Hiring Freeze in Europe?

[marmar]

By Ambereen Choudhury and Gavin Finch


Aug. 13 (Bloomberg) -- Barclays Plc, Credit Suisse Group AG and Royal Bank of Scotland Group Plc, which added 6,500 staff at their securities units in the past year, may lead a slowdown in hiring in Europe as the fixed-income trading boom fizzles out, recruiters said.

“Now that trading revenues are dropping there’s a hiring freeze on,” said John Purcell, managing director at executive search firm Purcell & Co. in London. “I wouldn’t be surprised to see people shedding traders again.”

Barclays Capital said last week income from trading bonds and commodities fell 40 percent in the first half amid the sovereign debt crisis. Fixed-income, currencies and commodities trading was the biggest revenue contributor at investment banks from Deutsche Bank AG to Goldman Sachs Group Inc.

The decline marks a reversal from 2009, when banks were able to boost trading revenue to a record by borrowing cheaply from central banks to invest in higher-yielding government bonds, allowing them to replace the bankers they fired during the credit crunch. The sovereign debt crisis caused bonds of Portugal, Greece and Spain to plunge, making the trade less profitable and made investors more cautious in taking on risk.

At the same time, revenue from advising on mergers and stock offerings tumbled. The pace of mergers in Western Europe dropped 9 percent in the second quarter from the previous three months, while the value of European share sales fell 27 percent, according to data compiled by Bloomberg. In all, investment banking fees in Western Europe slid 23 percent in the first half, according to New York-based research company Freeman & Co. ...........(more)

The complete piece is at: http://noir.bloomberg.com/apps/news?pid=20601087&sid=aUPfK7m5hrtc&pos=2