As we noted back in April, a career in investment banking is not what it was. Whereas it used to be quite easy to switch jobs every third year in return for a guaranteed bonus and a buyout of all previous deferred bonuses, it isn’t any more. In our survey earlier this month only 14% of you said you’d found a bank that would compensate you for the loss of your deferred bonuses if you went to work there. Anecdotally, headhunters say guaranteed do still exist, occasionally.
In the circumstances, fewer people are willing to take the risk of moving into a new job. More people are stuck in one job for long periods of time. And those who do move jobs need to do some careful due diligence to reassure themselves that their new employer is in a position to sustain their career. “People need to be very strategic in their career choices and to look at the long term viability of the business they’re moving to,” Simon Head, a consultant at search firm Correlate told us.
At a very minimum, we suggest you need to know the metrics above (profit margin, ROE, tier one capital ratio). Margins indicate how efficient a business is and how quickly it will need to cut costs if revenues falter; ROE indicates how happy shareholders are and the likelihood costs will need to be cut in order to keep them satisfied; a low capital ratio suggests more capital must be raised and that current capital-intensive businesses may be unsustainable. If any are too low, think twice. If all are too low, think seriously.
Courtesy of JPMorgan and UBS, here are the key measures for most major banks. You will have to click as we have made them small.
Best in class: BNP Paribas CIB, Barclays
Capital, SocGen CIB, JPMorgan Investment Bank (Goldman Sachs not available as it doesn’t provide figures just for the investment bank)
Worst in class: Morgan Stanley Institutional Securities, Credit Suisse Investment Bank, UBS Investment Bank
Return on equity:
Best in class (based upon UBS’s 2012 estimates): JPMorgan, Goldman Sachs, Deutsche
Worst in class (based upon UBS’s 2012 estimates): Bank of America, Morgan Stanley
Tier one capital ratio:
Best in class: State Street, US banks in general (except Bank of America)
Worst in class: Deutsche Bank, Bank of America, Credit Agricole