As we noted last week, margins in private banking are under pressure after a lot of hiring and not much in the way of additional revenues.
Unless things improve soon, headcount in private banks will clearly need to be 'rationalised' to bring margins up.
For the moment, however, experienced private bankers remain the Holy Grail. And they're so expensive that banks are falling over themselves to find and train promising juniors instead.
In this morning's UBS conference call, Oswald Grubel pointed out that UBS is now spending CHF100m every year in an effort to train junior private bankers at its internal 'Swiss private banking university.'
UBS is making a similar effort in Singapore, where it plans to train 25-50 private bankers as part of its aspiration to increase private banking headcount by 400 Asia over the next few years.
UBS aside, Bloomberg points out that demand for private bankers in Asia is enormous. Standard Chartered aspires to add 100 relationship managers over the next 12 months, RBS Coutts wants to hire 200 over five years, and Bank of Singapore wants to hire 30 within an unspecified time frame.
London private banking headhunters say there's also big demand for relationship managers in Europe. BarCap, Credit Suisse and JPMorgan are all hiring here.
Therefore, even though margins are plummeting, headhunters say private banking relationship management jobs are totally safe: "It's impossible for banks to grow and maintain a salesforce whilst also making redundancies," mulls one.
As long as this mindset endures, private bankers have reason to be immensely cheerful. "Prices for good people are the highest ever," says Grubel.