If you’re asked to name an investment bank that’s recruiting senior people in the front office right now, Barclays may not be the first place that comes to mind. Yes, Rich Ricci was bullish when he made a presentation on the future of the investment bank last month, but Barclays is theoretically de-emphasising investment banking and is promoting retail bankers instead.
Nevertheless, Barclays doesn’t appear to be neglecting investment banking recruitment. It has a new recruiting tagline – “Earn Success Every Day” – and appears to be hiring senior staff from rivals. There are even rumours that it’s offering them reasonable levels of upside.
In August and September alone, the FSA register reveals Barclays has brought on 12 experienced hires from other firms. They are:
John Gannon, formerly an ED at Morgan Stanley, who’s joined the Latin American sales desk.
Benjamin Laloum, formerly a quant structurer from Commerzbank.
David Cohen from Credit Suisse.
John Gallagher, a power and utilities analyst from SocGen.
Gabriel Yu Hin Ho, an analyst from Nomura.
Anita Jackman, a director in FIG from RBS who’s now a director in ECM at Barclays.
Christopher Mcgoldrick from Credit Suisse.
Salahuddin Rahman from SocGen.
Asad Rawra, from Canaccord Genuity, as a VP in natural resources in IBD.
Kirren Senivassen, a structured capital markets AVP from KPMG.
Katherine Ferry from hedge fund MAB Partners.
Corina Radu from Bank of Ireland.
12 senior(ish) hires in the back end of the year is quite impressive – although admittedly many of them may have been in the hiring pipeline for some time.
More excitingly, the head of recruitment at a rival bank complains that Barclays has been bidding people up – paying 20% more than rival banks to bring people on board.
Is Barclays paying more? Does it need to?
Unfortunately, the notion that you can increase your pay by moving to Barclays may be wishful thinking. One headhunter who works with Barclays tells us that hiring there is, “very sporadic,” and that it’s being “very careful.” 10% pay increases are more likely, he suggests.
It’s conceivable that Barclays may need to pay more to attract staff due to uncertainty over the future of its investment bank. However, Ian Gordon, an analyst at Investec, says this is misguided.
“In fact, Barclays’ Investment Bank has a hiring advantage,” argues Gordon. “In the past two to three years it’s gained market share in every period – even in the period of contracting revenues in the industry. It’s committed to the universal model of banking and to maintaining its franchise,” he adds. “There will be some scaling back of operations, but you’re not going to see an RBS-style withdrawal from certain areas. Barclays has scale and its business is sustainable.”
Less promisingly, Gordon says Barclays has been very successful at keeping its costs under control – and that headcount costs are being restrained especially heavily . In the second quarter, he points out that revenues at Barclays Investment Bank were up 4% while costs there were down 3% – despite a Libor-related regulatory fine of £200m falling on the BarCap books.
Barclays has also indicated that it reduced performance pay by 19% in the first half, says Gordon. Plus, it’s said that it’s keeping costs under control by taking advantage of the current state of the hiring market.
“There’s always a certain amount of headcount churn,” Gordon points out. “Earlier in the year, Barclays flagged their intention of replacing departing senior staff with people who could be hired more cheaply. I suspect this has contributed to their compensation ratio falling to 39%”
You may get a job at Barclays Investment Bank. But expect to be squeezed on pay.