The US sub-prime mortgage crisis will have only a minor impact on the i-banking sector in Australia, says a leading analyst.
Troy Angus, a portfolio manager/analyst at Paradice Investment Management, says local banks with exposure are significantly less than one per cent. “The big five domestic retail banks should be largely unaffected,” he notes.
That’s not to say there won’t be some bumps and bruises. “There might be problems with some of the domestic hedge funds that have bought repackaged sub-prime debt,” warns Angus. “US investment banks such as Bear Stearns, Merrill Lynch and Lehman Brothers will also be affected. These guys were packaging sub-prime debt, underwriting it and attempting to sell it onto hedge funds and other investors. We’ll find out more in late September when the US investments banks report third-quarter earnings.”
Despite the warning, one Sydney-based headhunter is unfazed by the looming deadline or its potential impact on local career prospects. Mary Grant, from Hudson’s banking and finance division, argues: “[The US i-banks] have such huge balance sheets that it won’t be an issue for them. In Sydney, any banks will do well, especially the top-tier investment banks such as Morgan Stanley, Goldman Sachs, UBS.”
“Throw Macquarie Bank into the top tier for people who want to work in Australia. But they don’t have the global reach of a UBS or a Goldman,” she adds.
To land a well-paid i-banking job in the current environment involves oodles of energy during a job interview and the ability to demonstrate potential value. “Candidates must know what they want to do, but doing a great job where you currently work counts for more than anything,” says Anthony Ayers of recruitment firm Chandler Heath.