Job creation in the City of London – the UK’s financial heart -rose by 34% in the last month, with the number of new roles rising from 3,030 in March, to 4,070 in April, according to a new study by recruitment firm Astbury Marsden.
Astbury Marsden says that new City job creation was up by 54% compared to April last year. The strong job creation figures follow positive first quarter results reported by major US and European investment banks – the first time in recent years that the big investment banks’ results have been so consistently positive.
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In particular, Morgan Stanley, Goldman Sachs and Credit Suisse all reported strong revenue growth for their trading divisions as volatility in the equities, bonds and currency markets all boosted trading volumes.
This renewed activity stands in stark contrast to spring 2014, when many banks cut back their Fixed Income, Currency and Commodity (FICC) teams. Previously FICC teams were typically returning reduced profits, hit by a combination of higher regulatory capital costs and sluggish trading in fixed income products because of ultra low interest rates.
Astbury Marsden explains that increased M&A activity is also driving job creation, with global M&A activity up 13% so far this year compared to the first three months of 2014, rising from $634 billion to $719 billion in January to March 2015*.
Smaller and newer firms are also benefitting from the growth in M&A activity, able to compete more effectively with bigger rivals in a less capital intensive market. For example, Mayfair based Robey Warshaw LLP has advised alongside Goldman Sachs on Royal Dutch Shell’s $70 billion takeover of BG Group, while near neighbour Zaoui & Co is sole adviser to Alcatel Lucent SA on its sale to Nokia.
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By GlobalDataAdam Jackson, Managing Director of Astbury Marsden, said: "The big investment banks are reporting a revival in trading volumes as clients adjust their investment strategies to reflect diverging monetary policies. In the USA markets are dealing with the life after Quantitative Easing, while in Europe the ECB’s asset purchase programme is still in full swing."
"It’s impossible to predict how long these higher trading volumes will be sustained, but banks that severely cut back their trading and investment banking teams will now be wondering whether they may want to start hiring if the recovery in revenues continues."
"On the M&A side while the bulge bracket firms are picking up dozens of mandates, smaller firms are also getting in on the action. That trend is even changing the geography of the City, with the new generation of investment banks mushrooming in Mayfair now becoming increasingly high profile."
