From the monthly archives:

October 2010

Banking is flourishing in Saudi Arabia. Foreign firms are rushing into the market as the government launches a $400 billion spending plan and is opening up its financial sector to investment. However, the Saudi financial industry is having a tough time finding investment banking talent to fill the new job opportunities.

Finding candidates with experience in management positions, or specialist and technical skills, is a particular challenge, according to a story released during the Reuters Middle East Investment Summit that took place this past week.

The story quotes Paul Gamble, head of research at Jadwa Investment, as saying “If you look at the rate the financial services have grown there are probably enough people to cover the ten (Saudi) banks historically… the pool of talent beyond that isn’t there. It reflects the growth of the financial services sector.”

And while there are Saudis working in the retail banking sector, a shortage of senior managers exists, particularly for investment banking jobs. Many firms are developing training programs to lure local candidates, but retention is an issue, too. Saudis who have trained abroad often switch firms frequently for increased compensation.

The government has set quotas for how many Saudi nationals that a private firm must hire. Presumably, this still leaves plenty of room for foreign-born candidates to work in investment banking jobs there. Which leads to the question: would you ever consider working in Saudi Arabia or any other Middle Eastern country, to gain international experience and bolster your career? Add your comments below.

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There have been mixed reactions to the news that the top Wall Street banks and securities firms will pay a record $144 billion in salary and benefits this year.

It marks a 4% increase from the $139 billion doled out in 2009, according to the latest survey from the Wall Street Journal. It parallels an increase in revenues at 29 out of 35 firms, rising from $433 billion to $448 billion, even after the slowdown in some profit-generating activities such as stock and bond trading.

The compensation figure represents 32.1% of revenues paid to employees. In percentage terms, this is still below the previous high water mark of 36% of revenues paid in 2007.

Naturally, there is some backlash against public firms continuing to reward their employees lavishly so soon after the end of TARP payouts. The article quotes Charles Elson, director of the Weinberg Center for Corporate Governance as saying, “Until the focus of these institutions changes from revenue generation to long-term shareholder value, we will see these outrageous pay packages and compensation levels.”

BNet, however, provided a more somber look at the compensation figures. First, they noted that these numbers are merely estimates. There’s still a quarter to go and anything can happen, such as when Golden Sachs decided to trim its compensation in the face of shareholder pressure.

Second, every autumn, the top firms quietly get rid of some of their highly-paid talent they think is dead wood. It’s a deliberate effort to shrink the claims on the bonus pool in the fourth quarter.

So while estimated salary and bonuses are up, the number of staff who may be receiving them may be shrinking. It may be a little too soon to count one’s bonus.

What’s your opinion? Do you expect your investment banking job compensation package to increase this year? Add your comments below.

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More MBA grads are heading off to Shanghai, Hong Kong, Indonesia and elsewhere for investment banking jobs, rather than traditional centers such as New York and Los Angeles.

Thomas Robertson, dean of the Wharton School at the University of Pennsylvania, recently noted that 25 percent of his school’s graduating class will be taking jobs in other countries, according to an article by CNBC.

Graduates are looking globally to find opportunities in the fastest-growing economies. And it’s not only U.S. students who are flocking overseas. Many of the international students who come here to earn their MBAs are instead returning back home to find their first jobs, especially in such robust economies as India and China.

Financing one’s MBA has changed dramatically in recent years as well. Many employers have stopped subsidizing advanced education for their employees. Instead, MBA students must pay the tuition themselves, which can cost upwards of $50,000. This of course incents students to look for the best opportunities for themselves, after graduation, rather than maintain any particular loyalty to their current firm.

An MBA degree still seems to be a sound investment. J.J. Cutler, head of Wharton’s MBA Admissions and Financial Aid and Career Management Office, says he’s seen a rise in on-campus recruiting this year.

In addition to the hiring trend overseas, there has been increased attention to less traditional career paths in finance. Both students and career guidance professionals note an increased attention in finance jobs in real estate, private equity, hedge funds and smaller, and boutique investment banking firms.

What about you? Are you broadening your investment banking job search to different geographies, or beyond investment banks? Add your comments below.

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Internships Vital for Investment Banking Jobs

October 4, 2010

Investment Banking firms look first to the ranks of former interns to fill entry-level positions, according to recent Wall Street Journal poll. That’s because the internship process is such an effective way to “preview” investment banking job candidates and get a better idea of what they can expect. An article in the Dartmouth also noted […]

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