If you're looking for a six figure front office banking job that's easy in the sense of 40-hour weeks and abundant low hanging fruit during 2017, you're going to be disappointed. Banks are under too much cost pressure to pay people for not doing much nowadays. And there are too many people out of the market trying to get back in for banks to pay economic rents to mediocrities just to keep them happy.
Even so, over the next 12 months some jobs in finance are going to be easier than others. This is partly down to comparables: it's going to be easier to excel in 2017 if you had a horrible 2016. It's also because banks appear prepared to cut some people a lot more slack than others.
If you work as a relationship manager in corporate finance, the first few months of 2017 are likely to be about schmoozing. As Goldman Sachs CFO Harvey Schwartz suggested last week, there are unlikely to be many deals done in the first quarter as clients focus instead on gauging the lay of the land under the new U.S. president. “The environment is pretty robust in terms of dialog,” said Schwartz. In other words, there's a lot of talk about doing potential deals but far less activity actually executing them.
Goldman, for one, is totally fine with this. In October, Schwartz said client relations people constitute the firm's competitive advantage and acknowledged that some deals can take seven years of "dialog" to materialize. There's no rush.
If you're not on board for the 2017 macro miracle, you're missing out. With the exception of Bank of America (so far), the fourth quarter of last year was great for rates desks everywhere; at Citi, rates and currencies revenues rose 30% year on year.
There was a good reason for this. As the chart below, using figures gathered by Morgan Stanley's banking analysts shows, the volume of derivative products based upon rates rose dramatically between the third and fourth quarters of 2016. Schwartz said this should continue as long as investors continue to expect moves towards a more, "inflationary environment" and "normalized rates."
Equity capital markets (ECM) bankers could also have an easy-ish 12 months, on the basis that 2016 was so awful that almost anything will look good by comparison. ECM revenues were down by 20% at J.P. Morgan last year and by 42% at Goldman Sachs.
Although most U.S. banks also had a horrible fourth quarter in ECM, there are signs that things may be turning. Morgan Stanley's analysts point to a 42% increase in global IPO volumes between quarters three and four. European equity capital markets volumes were entirely responsible for this rise: volumes continued to fall in the U.S, and Asia in the three months to December. On this basis, European ECM looks like a surer thing.
Banks themselves are expecting ECM revenues to come back. Last week, Morgan Stanley CEO James Gorman said he was optimistic that ECM volumes will normalize this year, adding that last year was an anomaly caused by "idiosyncratic risk events" (ie. Brexit and Trump).
2017 could also be comparatively easy for prime brokerage salespeople. Most banks seriously chopped their prime brokerage client lists last year, leaving swathes of smaller hedge funds looking for a new prime broker to work with. For this reason, bringing in new prime brokerage clients could be a little like shooting fish in a barrel. -Except that the hedge fund clients banks really want are now well-looked after and hard to move.
Deutsche, Credit Suisse and Morgan Stanley are all expected to emphasize their prime brokerage businesses this year. James Gorman said last week that "deepening" prime brokerage relationships is a priority for the bank in 2017.