Are you a student applying for a graduate job in an investment bank in 2013? This is what you need to know about banks' strategies
Are you a university student who wants to work in an investment bank, starting in 2013? Whether you're applying for a summer internship or a graduate position, now is the time to be sending in your application.
However, as you will no doubt be aware, many banks are in the process of making redundancies and the financial services industry is in a state of flux. In this situation, you may be inclined simply to apply to work at as many banks as possible in order to maximise your chance of success.
Alternatively, you try a more targeted approach. Bearing in mind the sector you want to work in, you may instead wish to send your CV to precisely the banks which are making a priority of that business for the future. If this is the case, here's what you need to know about each bank's strategic intentions.
1. Barclays Investment Bank
We have details of Barclays' most recent strategy review here.
Going down: Operations jobs, anything which could be shifted to a cheaper overseas location. Structured credit (credit derivatives), securitized products (click here for a definition of securitization).
Going up: Trading simple credit products. The bank is very committed to fixed income trading and is waiting for weaker rivals to drop out.
Neutral: Equities, M&A, corporate finance
2. BNP Paribas
Going down: Fixed income sales and trading jobs.
Going up: Earlier in September, the Financial Times said BNP will soon unveil a new global strategy under which it will be reducing its dependence on the Eurozone and increasing its presence in Asia and the US. The bank is already expanding its European debt capital markets business (DCM business), the FT said.
Neutral: BNP's existing adaptation plan emphasis its areas of strength (equities) and talks about increasing corporate banking and client relationships. M&A banking should, in theory, be a good bet therefore.
3. Credit Suisse
Credit Suisse's most recent strategy presentation is accessible here. See slide 24 for its plans for the investment bank.
Going down: M&A and advisory and capital markets teams are being 'rationalised' at Credit Suisse. Operations jobs are being 'integrated' across the bank. This implies redundancies in both areas. Some fixed income jobs are also at risk at Credit Suisse: the bank needs capital and is reducing the amount of capital it allocates to fixed income.
Going up: Credit Suisse didn't indicate any areas as a strategic priority. In the past, it's said it's planning to grow in: Foreign exchange, global rates (including electronic trading), commodities, prime services, simple derivatives trading on exchanges and sold to corporate clients, equity underwriting (ie. ECM).
4. Deutsche Bank
Deutsche made a series of strategy presentations related to its corporate and investment bank a few weeks ago. You can see one of the most relevant ones here.
Going down: Deutsche is in the process of making 900 redundancies, focused on equities and corporate finance (capital markets and M&A) in Europe and Asia Pac.
Going up: As the table from Deutsche's strategy presentation which we show in this article makes clear, the bank intends to invest in invest in foreign exchange, emerging markets and its trading platforms. Anything to do with electronic trading looks like a good bet.
5. Goldman Sachs
Goldman last elucidated its strategy at the time of its Q2 earnings.
Going down: Senior staff. This isn't much help if you're trying to work out which sector to apply to at Goldman Sachs, but it might be reassuring to know that the bank foresees junior staff becoming comparatively more important. Meanwhile, at the senior end, it's letting go of 100 partners. Less promisingly, Goldman is making it easier for itself to get rid of graduate hires by doing away with two year fixed term contracts. It's also pooling all its junior M&A staff in two large geographical teams in Europe - rather than in the small sector-focused teams it had previously. This could make life more political as everyone competes to get on a deal.
Going up: Goldman is investing in its information systems. Anything in IT looks hot - as long as it can't be moved to low cost overseas centres like Bangalore and Singapore, where most of the hiring at Goldman is expected to happen in future. Jobs related to electronic trading platforms - especially anything to do with the new G-Sessions fixed income trading platform - are going to be hot.
JPMorgan hasn't said much about strategy recently - it's spent more time trying to manage the fallout from the big trading loss at its London office.
Going down: JPMorgan is one of the few big banks that has been adding staff rather than making redundancies. No business areas at JPMorgan therefore seem to be going down per se.
Going up: Following the disastrous Bruno Iksil affair anything related to risk - especially operational risk, looks hot at JPMorgan.
7. Morgan Stanley
Morgan Stanley's CFO Ruth Porat made a presentation a few weeks ago, although it didn't really say too much.
Going down: Fixed income sales and trading jobs look precarious at Morgan Stanley. The bank is under big pressure to improve the performance of its fixed income business, which hasn't done well recently. Porat said the bank plans to cut the capital it assigns to its fixed income business by 35% by the end of 2014. Fixed income bankers at Morgan Stanley are said to expect a radical downsizing.
Going up: Nothing in particular, although Morgan Stanley's CEO James Gorman did say earlier this year that Morgan Stanley's doubled the number of risk professionals it employs since 2008.
Nomura is the midst of a major strategic rethink. It's already cut $1.2bn of costs from its investment bank and now it wants to cut another $1bn.
Going down: Nomura is making a lot of redundancies in M&A and equities. From now on, its M&A and equities business will focus on a few core sectors: financial services, natural resources, industrial companies and private equity. Anyone working in M&A and equities who doesn't focus on these sectors is at risk of redundancy.
Going up: Anything related to fixed income sales and trading still looks like a good bet at Nomura.
9. Royal Bank of Scotland Markets and International Banking
RBS made a strategy presentation only today. You can see it here.
Going down: RBS is making a lot of redundancies. In 2012 alone, it plans to let go of 3,000 people from its investment banking business. Another 800 may go in 2014. Many of the cuts have already fallen upon RBS's equities sales and trading and M&A business. It also wants to pull back from some of the more risky structured credit products.
Going up: Like most banks, RBS wants to increase the amount of trading it does electronically in fixed income markets. Anything to do with electronic trading or with the technology that enables electronic trading looks promising. RBS is also committed to maintaining its leading position in foreign exchange trading and its leading position in European debt capital markets.