City of London hiring fails to match rise in business activity

New jobs to support IPOs and mergers offset by losses elsewhere

The City’s upturn in flotations, mergers and acquisitions has yet to bring about a surge in hiring, say recruiters.

About 2,380 City vacancies were created in September, down 4 per cent from August and down by a similar amount on a year ago, according to Astbury Marsden, a recruitment company.

The number of initial public offerings on the London market has reached a post-crisis peak, but hiring to support IPOs and M&A activity has largely been offset by pressure to shrink other parts of investment banks.

Astbury Marsden said regulatory and economic pressures had forced City institutions to continue to reduce their fixed income teams.

Higher regulatory capital requirements reduced the profitability of fixed income, currencies and commodities trading teams, it said. Banks had been forced to review these areas as a result of new regulatory requirements to hold more “tier one” equity capital against certain assets.

Fixed income trading desks have also been hit by a decline in trading volumes in anticipation of the Federal Reserve starting to scale down its programme of asset purchases. The expected date of this “taper” was postponed in mid-September.

Mark Cameron, Astbury Marsden’s chief operating officer, said: “The market has been very upbeat about the return of IPOs, but this hasn’t impacted banks’ hiring plans yet.”

This was partly because they had so far had enough capacity and partly because “they would like to see more of these deals getting away before they make any major commitments to new staff”.

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