After a solid year of retrenchment in 2008 followed by several years of declining foreign staffing levels, European investment banks are again turning to the United States in search of new opportunities to expand their revenue. With the European economic outlook unimproved, investment banks are starting to seek out revenue wherever they can find business. Though, with markets continuing to be tight even within the United States, it remains to be seen whether this expansion will bring success to the European institutions, or just increase competitive tensions which result in lower margins for all players.
BNP Paribas and Societe Generale Lead the Way Back Into the United States
Two of the first movers back towards the United States are French giants BNP Paribas and Societe Generale. According to Reuters, both banks are actively recruiting American bankers and are preparing to grow their overseas staffing levels for the first time in years. Both banks are focusing in on investment banking segments that are still producing growing revenues, including fixed income, private banking and mortgage securitization. While this does not match the widespread influence European banks had in U.S. markets prior to the crash, it certainly is a new attitude that is opening up desperately needed opportunities for those currently seeking new positions within the industry.
While the two French banks are certainly making a big splash, Nomura is also hiring more subtly, with the announcement of new management for their Americas coverage. The Japanese bank’s wholesale arm recently had reported its strongest revenues from the segment in recent history.
In Past Years, European Banks Shifted Focus to Defending Own Market
Since the financial crisis began to expand in 2007, European banks had adopted a more defensive stance. This became even more apparent as the economic situation in Europe continued to decline. Requiring all available financial reserves for their European operations, most foreign banks, including BNP Paribas and Societe Generale, retrenched their American presence. However, as the European economic recovery has stalled and new revenues can’t be found at home for most of these institutions, the shift back to America is a logical choice.
What Do These Latest Developments Mean for Investment Banking Job Seekers?
The departure of the major European banks from the American market was certainly a major contributor to the dark times in the investment banking job market over the past several years. The return of two major French investment banks is certainly very welcome news for those seeking opportunities within the industry.
While competition among job seekers will remain intense for some time with the vast number of bankers seeking work, those with specialized experienced in select niches will start seeing more openings. As we’ve seen over the past several months, investment banking opportunities have been focused in select areas of the profession. This remains true with the European banks expanding their U.S. presence. The focus on fixed income, private banking and mortgage securitization is consistent with the growth seen domestically within American investment banks. Unfortunately, the outlook remains quite negative for those who are specialists in investment banking markets that continue to decline, such as initial public offerings.