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What was and wasn’t hot in the Nordic region in 2009?

2009 WAS A GOOD YEAR FOR….

Bonuses

On the one hand, clearly, it was a bad year for banking bonuses, what with performance-related remuneration becoming as much a public whipping post in the Nordics as everywhere else in the world and the spectre of tougher regulation still very much on the cards.

But look at what Nordic banks were actually shelling out in some areas this year, despite the global downturn, and you get a different story.

Swedbank, for example, in October said it had earmarked SEK442m for bonuses this year in its markets division, a 58% increase year-on-year. Stockholm daily newspaper Dagens Nyheter in the same month calculated that Sweden’s four main banks would pay out a combined SEK5.4bn in bonus payments this year, just shy of the SEK5.7bn in 2008, with SEB topping the rankings.

The key is that banks must recognise bonuses have to be proportionate, stresses Ola Pettersson, economist with the LO (Landsorganisationen I Sverige) trade union.

“We are less interested in how wages are set and more in how they affect financial stability. If a very large part of the pay structure is flexible and based on result-oriented remuneration, then that can add to the risks being taken,” he explains.

Equities

One bright spot this year has been equities. Equity capital market deals were buoyant, according to figures from Dealogic in October, while DnB Nor, Nordea, SEB, Swedbank and Denmark’s Sydbank all carried out cash-calls and rights issues during the year. M&A activity also picked up considerably over the year.

The year saw a flurry of activity with equities teams, most notably within SEB’s Enskilda equities business, where a raft of appointments and promotions was made in September, and which in turn followed a swoop on SEB by Carnegie.

“ECM has been a winner, even though the number of IPOs over the year have been pretty much at an all-time low,” agrees Johan Wingren, Michael Page’s local banking and financial services manager.

Hedge funds

Financial markets minister Matts Odell proved an unlikely white knight to the battered Nordic hedge fund market in July when he cautioned European legislators against being “overzealous” in their regulation of hedge funds and private equity.

And, all in all, it’s not been a bad year, despite the global crisis, argues Philip Rydén, associate director at fund of funds Harcourt, which established Sweden’s first hedge fund index in 2005.

Equally weighted Swedish hedge funds are up nearly 14% on the year, while asset weighted funds are up more than 15%.

“In general long/short equities have been doing well largely supported by the Swedish stock market being up 45% this year. Looking over the past 24 months, the Swedish hedge funds have shown impressive performance, both on an absolute basis as well as relative to their global peers,” he adds.

AND 2009 WAS A BAD YEAR FOR….

Jobs

Much as elsewhere, all the major Nordic banks reduced headcount this year. Swedbank and SEB lost 1,718 and 1,500 positions over the 12 months from January and Danske Bank shed 1,367, or 5% of its workforce in the same period.

Nordea, by comparison, waved goodbye to around 980 workers, or 3%, while DnB Nor shed 579 positions. Handelsbanken lost 300 employees over the year, though also partly offset this through its acquisition of Lokalbanken.

However, taken against the global picture, banking services employment held up reasonably well, argues ILO’s Pettersson.

“There have not been the really massive job cuts such as we have seen in London, New York or Ireland. But in sectors more exposed to the financial crisis there have inevitably been more cuts or at least a freeze on replacing people,” he says.

Graduates

2009 has not been a good year to graduate wherever you are in Europe. In the Nordics, Danske Bank in August conceded it had nearly halved its intake on to its two-year graduate programme, while at the same time Nordea admitted it had seriously curbed the numbers it was taking on.

“It has been a tough year for business graduates. It has been very competitive and there has also been a lot of psychological pressure on students because of the financial crisis. In response to these uncertainties, universities have been trying to help students prepare as best they can, through career coaching, providing workshops and arranging internships and jobs,” agrees Marina Mourad, director of the Career Centre at Stockholm University School of Business.

While banks have maintained a presence on campus, recruitment activity has not been as aggressive as in previous years, she adds.

Graduates have been encouraged to broaden their outlook, to look both outside Stockholm geographically and at the type of operator and companies they are approaching.

“We have been dealing more and more with securities, insurance and fund management firms, although often what is on offer is temporary rather than permanent positions,” adds Mourad.

Recruiters

Banks sat on their hands or cut positions (see above) and the jobs market was awash with experienced candidates, so perhaps it’s not surprising that Nordic financial recruiters had a torrid time of it this year.

“A lot of firms have had to downsize. I think there has hardly been a recruitment firm that has not reduced its staff in some way over the year,” says Michael Page’s Wingren.

“I think 2010 will still be pretty difficult. Yet I think people are also beginning to realise that there may be opportunities out there and are going to become less scared to venture out into the market. But it is going to be more hiring for replacement positions rather than expansion,” he
adds.

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