It’s great news if you took a temp role in despair last year: armed with new hiring budgets for 2010, international banks in Asia are turning more and more contractors into permanent employees.

Standard Chartered, for example, has recently offered positions to several IT contractors in Singapore, according to one headhunter who asked not to be named.

A bit of recent history helps explain why the banks are suddenly so keen on conversion.

Contracting roles started to rise in Q3 and Q4 last year. Recruitment requirements had increased compared with the first half of 2009, but headcount restrictions remained, so contracts were a short-term way of skirting around the freezes.

“Now budgets have opened up for 2010 and banks have to ability to take on these people as permanent staff members,” says Jeremy Canning, managing director, Morgan McKinley Singapore.

Moreover, banks also began to use contracts last year as de facto probationary periods, says Rhoda Rivera, consultant, contracting division, Ambition Hong Kong.

“If the contractor performed well and was seen as an added value to the business, then they will get offered a permanent role. We have seen this happen already in 2010,” she adds.

There are of course exceptions. Sometimes the contract is simply extended (rather than the role being made permanent ) “due to continued headcount freezes, projects deadlines being delayed, or firms looking for a more qualified candidate to offer the permanent role to,” says Rivera.

And as a general rule, professionals who are working on time-specific integration projects (such as ANZ-RBS) are more likely to find that their services are not required when their contract ends.