Superficially, it looks bad. There have been 11,000 job losses in the UK according to the latest report from the CBI and PWC. They're all in banking. Doom.
To compound matters, the FT has joined the chorus proclaiming that 2012 won't be a good year. It cites Christian Meissner whose been speaking very euphemistically about redundancies. "2012 is not going to be a great year by any means," said Christian. “There might be brief bursts of activity and the odd good month, but we really need the macro issues to be solved. Many banks think about their cost base in such a difficult environment.” It also cites Tom King at Barclays, whose belief banks will need to, "make important structural decisions re-evaluating their overall business model” (Barclays Capital notwithstanding), is reiterated.
But is it really that bad? A closer look at the CBI/PWC report (which is based on a survey of its members) suggests it isn't - at least not if you work in investment banking. The report covers all iterations of banking from retail banking to building societies, to corporate banking, to fund management, to securities trading. The indications are, broadly, that redundancies are behind us.
Hence in 'banking,' a catch-all term for PWC and the CBI which includes retail banking, corporate banking and investment banking, the headcount trend is looking good. It's swung from -46 for headcount over the past three months, to +1 over the next three. Similarly, in 'securities trading' a balance of -26 respondents were gloomy about headcount for the three months from March; now 0 are. And in investment management, a balance of -27 were gloomy about headcount between March and June; now +27 are feeling confident about it.
If we're on the cusp of new redundancies, this report hasn't picked up on it.
More cheeringly, Credit Suisse has come out and said that all its divisions will probably be profitable in the second half. This follows the suggestion a few weeks' ago by Bruce Thompson, CFO of Bank of America that the second quarter has been, "clearly much better" than the first.
Don't be sad, it's not that bad. Probably.