The number of people employed in Ireland’s financial services industry now exceeds 25,000, but recruitment in the banking sector nearly ground to a halt last year.

The banking sector increased its headcount by just 2.6% in 2007, or 289 appointments, according to the 2008 Finance Dublin Yearbook.

This follows a bumper 2006 when nearly 3,000 new roles in the banking sector were created in Dublin’s International Financial Services Centre (IFSC) – numbers employed rose from 8,088 to 10,902.

James Hayes, manager – banking and financial services, at recruiters Robert Walters, says things are looking distinctly frosty in the banking sector.

“Any growth plans firms had at the tail-end of last year have been cut significantly. The first to feel the pinch have been the junior to mid-level hires, which have slowed significantly. In some instances, banks are taking on senior people as they think strategically about how to weather the current storm.”

By contrast, the funds sector remained robust throughout last year, with employment numbers swelling by nearly 15%, to 10,599.

“Most of the funds companies still need people, and are not being affected by the economic slowdown,” says Paul Cotter, director of Cotter Personnel. “And candidates still have their pick of the jobs – a lot of the vacancies available eight weeks ago are still open now.”

Securities services seems to be an area of growth for the bulge-bracket banks in spite of the current downturn. Goldman Sachs, for instance, saw a profits reach $985m in Q2 this year – 29% higher than the previous record figure. Meanwhile, profits from Citigroup Global Transaction Services rose 42% in Q1 against last year, and State Street saw a 34% increase in servicing fees over 2007.

The total number employed in the IFSC increased by just 8.2% last year, nearly half the 16.1% rise in 2006.