What goes up must come down. This applies especially to jobs at Russian investment banks. One minute Russian banks are bullish and pawing the ground. The next, they're reverting to their bearish national stereotype and retreating to a cave.
VTB Capital is a case in point. In 2008, VTB got itself a new office in London's Cornhill - the prestigious former home of Lloyds Bank in the City, doubling its floorspace in the process. It set about hiring senior investment bankers to fill its new premises and in 2011 recruited Atanas Bostandjiev from Goldman Sachs as head of VTB Capital in the UK and internationally (ex-Russia). Bostandjiev proclaimed VTB's appetite for hiring senior investment bankers for its international business and last year VTB increased its headcount of FCA-registered bankers in the City by 40%. As recently as April, Sue Maple, VTB Capital's Global Head of Human Resources, told us that the bank was, "continuing to develop its presence in Europe, Asia and North America. “
Now, however, VTB seems to be having second thoughts. Ex-Goldmanite Bostandjiev has produced a strategy document suggesting that VTB Capital fire 40% of its international staff (231 people) in order to save money. Costs at the bank were 95% of revenues in the last quarter and VTB has missed its profit targets for five consecutive years. Bostandjiev reportedly wants to close the equity derivatives, commodities and structured credit trading groups. He also wants to move equity research jobs back to Moscow.
How afraid should VTB Capital's newly hired bankers be? The bank isn't confirming Bostandjiev's proposals, which insiders say are his private opinions. Nor is it explicitly denying them, however. "We are constantly reviewing the execution of our international strategy and fine-tune the model as both the market and our business evolve," said Alexei Yakovitsky, Global CEO at VTB Capital, "We are generally happy with the progress we made internationally in the last couple of years and expect further growth in the international revenue."
For the moment, VTB still seems to be hiring. The FCA Register indicates that it added Alexis Bethenod, a specialist in marketing derivative to French corporates in December. It's also been adding new analysts, like Sanjar Ismailov who previously worked at Credit Suisse and is about to open applications for its 2014 graduate programme.
If VTB does decide to cut a large portion of its investment bankers, it won't be the first Russian bank to do so. Renaissance Capital has cut its international staff from 1,200 people at the peak two years ago to just 550 now. Alexander Merzlenko, head of the investment bank in Russia, said the restructuring and cost cutting process at RenCap is now complete.
Are Russian banks a risky bet if you're looking for a job in banking? Not at all, says Not at all, says Taru Oksman, director at the emerging markets-focused search firm Riverhouse Partners. "It's inaccurate to say Russian banks are particularly prone to hiring and firing - a lot of international banks have done the same, sometimes by stealth," she told us. "The key thing here is that the revenue wallet is smaller - the teams in a lot of banks are still way too big for the size of the business we're faced with now. It's logical that businesses will recalibrate."