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Investment banks’ trading desks excluded from financial services hiring party

It was all looking so promising – after a positive summer, financial services recruitment, including front office investment banking roles, was supposed to be expanding again. However, while the UK’s financial sector enjoys its best quarter for jobs growth for six years, talk is already turning to cuts in banks’ trading desks.

The PwC/CBI quarterly financial services survey is out and it’s good news for employment. Across the financial sector, 10,000 jobs were created in Q3, it says, a rise of 24% and the biggest increase since the same period in 2007. The traditionally slow fourth quarter is also likely to create a further 2,000 positions. This, it says, brings the numbers employed up to 1.14 million.

The definition of financial services jobs in this context is quite broad, covering everything from investment management and securities trading to retail banking, insurance and building societies. According to the CEBR, though, there were 256,000 people working in ‘City jobs’ at the end of last year.

For those working in securities trading positions, the picture isn’t as rosy, according to the PwC/CBI survey. Yes, employment increased in the third quarter, but sentiment has shifted after what is broadly anticipated to be a poor three months for trading desks – particularly in fixed income – and job numbers are likely decrease going into the final quarter, with a balance of 36% of respondents saying they expected a reduction in numbers employed. ‘Staff turnover’ or those heading for the exit, whether voluntarily or not, is expected to increase.

In fact, the PwC/CBI survey suggests that the strongest rise in employment was within the life insurance and building societies sectors.

The prognosis may not be entirely bleak for investment banks’ trading desks. A recent note from Deutsche Bank analysts suggested it was largely European banks who were losing market share in their FICC businesses and U.S firms had been relatively resilient in the third quarter. Nonetheless, success is no guarantee of job security – Credit Suisse has been performing well in equities, but is still expected to roll out some job cuts in the division imminently.

Overall, over the past three months, front office headcount has declined within Barclays, Citigroup, Credit Suisse, Goldman Sachs, HSBC, JPMorgan, Morgan Stanley, RBS and UBS, according to analysis of the FCA register by corporate finance firm IMAS.

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