In the latest installment of his regular “View from the Top” series, our columnist shares his thoughts on the banking sector recovery and how it’s affecting recruitment.

The author is a senior banker based in Singapore, with three decades in commercial and investment banking at major international firms. If you haven’t read any of this other columns, click here, here and here.

The global economies have now officially “hit bottom” and have entered a recovery phase. However, we still don’t know how strong, sustainable and widespread this recovery will be. Banks have also put the worst behind them, so the logical question is now “what happens next?”

As a consequence of government intervention, many of the well known global US and European banks are currently considered adequately capitalised. In addition, there are also some resilient banks, such as Barclays, who have remained fairly healthy and fairly independent throughout this crisis.

Finally, the super regional banks, such as Standard Chartered, ANZ etc, and many of stronger Asian state-owned banks, have also remained quite profitable despite a marked deterioration of their loan-asset-portfolio quality.

It’s apparent that many of the above-mentioned banks are now salivating at the opportunities to be harvested from the forthcoming economic recovery. It’s just a question of how much and where they want to focus their finite resources to get the best returns for their effort and investment.

It’s also clear that the global stock market recovery, alongside the increasing risk appetite of investors, enhanced credit confidence and the return of inter-bank liquidity, makes private banking and wealth management a key growth-focus sector for many banks.

In addition, there is also a revival of merger and acquisition activities and demand for fund-raising, particularly via ECM products such as IPOs, rights issues, convertible bonds etc.

However, pure corporate lending, loan syndications and straight bond issues are still slow to start up, although there appears to be some risk appetite for loan papers from the top-tier Asian and global firms.

Recruitment ramifications

With the above in mind, banks have started to hire well-connected and pre-trained private/priority bankers hoping to tap into their past relationships, especially those individuals who have currently benefited from the stock and property market recovery. Several banks have also started hiring senior investment analysts to advise these clients.

In wholesale banking, there is also a growing demand for senior relationship bankers who can open doors, market, and cross-sell investment banking/ECM products to large companies, and who can also originate and advise on M&As and corporate restructurings.

On the product side, there is increased recruitment of fixed income specialist (bond and convertible bond) in structuring and trading.

There is still not much employment demand for pure vanilla lending and debt originators. However, some banks, such as ANZ and SCB, continue to hire relationship managers to take advantage of the decreased competition and gain market share (whilst actually making exceptional earnings, albeit with the reduced credit-risk profile).

So if banking is still a preferred choice career, there are jobs available in the sectors highlighted above.

However, sustained across-the-board hiring by many of the global US and European banks will probably come much later (in mid-2010) when the recovery is more certain and stronger. If you can afford to wait a bit longer (about another six to nine months), there will probably be good opportunities to join your preferred institution.