The pandemic boom of banking graduates fades after the exodus of juniors

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Each year, thousands of top graduates compete for a handful of high-paying jobs at the world’s top investment banks.

But in some banks, the competition for places is becoming less intense.

Credit Suisse, HSBC and Morgan Stanley have all seen a drop in applications for graduate places and internships this year, whether in Europe or globally, according to figures obtained by Financial News.

The biggest drop was at HSBC, where the number of students vying for graduate places in Europe fell 49% to 3,558. Globally, applications fell 36% to 10,763 The British lender has increased the number of hires at its global banking and markets unit by 27% from 2021 to 108 this year.

At Credit Suisse, which has been rocked by successive crises and executive departures over the past year, applications in the Emea region fell 10% to 23,500, and 7% globally to 77,000. , according to people familiar with the numbers. The bank has taken on 100 interns in the UK, mostly within its investment bank.

Meanwhile, Morgan Stanley received nearly 6,000 fewer applications for its European internship program this year, down 12% from the previous year. It had 41,211 students competing for 816 internship places in the Emea.

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Banking graduate places are notorious for their brutal hours. A handful of Goldman Sachs analysts leaked a presentation last year describing physical and mental exhaustion as they endured 100-hour weeks, and the sector has battled an exodus of exhausted juniors.

Investment banks have been forced to raise entry salaries by 40% in London over the past year, with most rising by £50,000 to £70,000 for fresh out of college graduates.

But while some investment banks have seen a drop in applications this year, the battle for a number of jobs remains intense.

Morgan Stanley and Credit Suisse’s figures for 2022, although lower than last year, are still in line with the number of applications received in 2019 and 2020.

“Demand remains very high and very competitive,” said Logan Naidu, managing director of headhunters Dartmouth Partners, which recruits for graduate positions in banking. “There aren’t many jobs where you can earn £100,000 in total pay right out of college. More than ever, students entering investment banking know what they’re getting into.

Other banks have attracted more interest from juniors, including Goldman Sachs, despite the memo’s negative attention leaked from its analysts.

Goldman received 236,000 applications for its global internship program, an increase of 17%. It hires approximately 3,000 employees each year.

JPMorgan had 270,855 students competing for 4,604 internship positions globally, an increase of 20%. On the other hand, the progression within its investment banking division was not as strong – 54,000 applications for 480 places, an increase of 5%. In Emea, applications are up 19% for the same unit, a bank spokesman said.

Citigroup received 73,000 applications for 805 intern and full-time positions within its Emea business, which is stable a year earlier as the number of recruits increased.

A Bank of America spokesperson declined to comment on the graduating recruits. Deutsche Bank did not respond to requests for comment.

Investment banks have not reduced graduate recruitment during the pandemic, even as other sectors have retreated, said Martin Birchall, managing director of High Fliers Research, which tracks the number of graduate recruitments in the UK. United.

“We are seeing growth in all sectors that cut during the pandemic, but investment banking is stable through 2023,” he said. “Banks have largely steered clear of campuses, preferring fully online recruiting initiatives that widen the range of candidates applying. Whether that means they recruit beyond business students from top universities remains to be seen.

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In addition to raising wages, the banks imposed restricted working hours, including protected weekends and “no-login” holidays. However, senior bankers said Financial News this real change would be difficult without drastically increasing the number of recruits, which would both reduce the exclusivity of the industry and necessitate wage cuts.

Nicola Thomas, head of research at the Institute for Student Employers, said there were 118 applications for every available role in the broader financial services industry last year, an increase of 17% and the highest rate since 2001. Students who stayed in higher education or struggled to break into the job market at the height of the pandemic in 2020, contributed to the rise, she said.

However, she added that there had been a “big drop” in applications in financial and professional services in 2022. Across all sectors, applications from graduates fell 48% compared to the previous year, according to the annual ISE vacancy survey.

“There has been a shift from security-seeking graduates – roles such as teaching or public service – during the pandemic to higher-paying roles and salaries have increased as applicants have declined,” said said Thomas. “However, graduates also avoid companies that don’t share their values ​​on issues such as climate change, as well as jobs with insane hours, even if they pay well.”

To contact the author of this story with comments or news, email Paul Clarke

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