Headcount at the world's largest investment banks shrank by 1,500 in the first half of 2019, and equities trading took the brunt of it
- Headcount across investment banking, equities trading, and FICC has continued to shrink, new data shows. Banks shed 1,500 jobs from those businesses from the mid-point of 2018.
- The new data paints a dim picture for the biggest investment banks in terms of client appetite for their services, and suggests technology is continuing to crush margins for old-school trading roles.
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Headcount across investment banking, equities trading, and FICC continued to fall in the first half of 2019 while revenue for the three businesses slumped to a 13-year low, according to data tracking the world's biggest banks.
The midyear report-card from data firm Coalition, which showed there were 1,500 fewer jobs across those businesses, paints a dim picture for big banks. Economic uncertainty and trade tensions have clients sitting on the sidelines instead of trading or issuing equity and debt, and technological change is also playing a part (the report called out a continued decline in client demand for so-called high-touch cash equities trading.)
There were 50,400 front-office banking jobs midyear, according to the report. That's down from 56,700 at the same point in 2014, with headcount shrinking each year along the way.
Equities fared the worst, the figures showed, with total revenue plunging 17 percent and the number of full-time workers falling 5%. Equities was plagued by shrinking margins in prime services and cash trading, and headcount took a hit as some banks shuttered desks, Coalition said.
Coalition tracks the 12 largest global investment banks: Bank of America, Barclays, BNP Paribas, Citibank, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, Societe Generale and UBS. It defines headcount as revenue-generating, front-office roles; it excludes front-office admin and support roles.
Deutsche Bank this year announced it was exiting global equities and cutting 18,000 jobs as part of a sweeping overhaul. Credit Suisse has an informal hiring freeze in place across some parts of its sales, trading, and research unit, Business Insider reported in early August.
And Citigroup is laying off hundreds across equity and fixed-income trading, Bloomberg reported this summer.
Revenue from fixed income, currencies, and commodities (FICC) fell across all products - and headcount was down 3%, with banks scaling back commods and rates trading.
Weaker activity in equity capital markets and debt capital markets, along with slower IPO and M&A activity, dented investment banking revenue overall, the Coalition data showed. Headcount there slipped 1%, dragged lower mostly by cuts in DCM.
By many measures, big business ought to be booming, but you wouldn't know it by looking at how investment banks fared in the first half.
Stock markets are trading within striking distance of all-time highs, the US unemployment rate is plumbing nearly five-decade lows, and a crop of companies boasting entirely new breeds of businesses have launched - or are primed to debut - on the public markets.