Azernews.Az

By Bloomberg

The 10 largest investment banks shrank employment 4 percent in the year through September as some firms pulled out of businesses to cut costs and increase capital levels, according to researcher Coalition Ltd.

The number of front-office positions at the 10 firms fell to 51,700 in the third quarter from 54,000 a year earlier, London-based Coalition said in a report published today. Fixed income, currencies and commodities trading jobs dropped 10 percent to 17,600 over the period, the largest decline of three business areas the consultant examined.

“The reductions since 2013 are primarily due to actions undertaken by European banks withdrawing from ‘scale-and- completeness’ strategies,” Coalition said. “Most restructuring has been completed, but pressure on costs remains intense across the industry, both to improve returns and balance sheets.”

Banks are weighing how far to cut debt-trading desks to weather a decline in client activity and meet stricter capital requirements. In Europe, London-based Barclays Plc is shifting resources from its investment bank to retail and corporate units while Germany’s Deutsche Bank AG and Credit Suisse Group AG in Zurich are exiting most of their commodities businesses.

The 10 banks saw revenue from dealing fixed income, currencies and commodities decline 7 percent to $56.9 billion in the first nine months of the year from the same period last year, Coalition said. Income from trading the currencies of the Group of 10 economies dropped 16 percent to $4.6 billion, the largest percentage decline of six fields included in the FICC business, the report shows.

Banks have also lowered expenses by substituting senior employees with more junior personnel, according to Coalition.