Banking & Financial Services Market Update Q2 2017

Michael Costello / July 12, 2017

Q2 Market Update Banking & Financial Services

 

Market Overview

So far, 2017 has been an eventful year for the Irish Banking and Financial Services Sector. With substantial changes in the domestic pillar banks and new entrants to the FS market, we are witnessing one of the most intriguing periods for Irish Banking and FS candidates.  With a new CEO at the helm at Bank of Ireland and additional restructuring a possibility to the floatation of 25% of AIB in the largest IPO in Europe in 2017, the pillar banks are the subject of much scrutiny but in a progressive sense of the word. Barclays and HSBC continue to build out their Dublin operations while there are a number of new entrants in the pipeline in the capital markets and asset management sectors, with a huge amount of interest in what sort of front office mandates Dublin can attract in the Brexit.

 

Corporate & Retail Banking

The overwhelming theme in Corporate Banking has been the acceleration of the asset recovery based model which dominated the post-crisis era to the re-emergence of lending being the weapon of choice. Not since 2007 have we observed demand for talented relationship managers with the ability to originate. This poses a number of problems though. While there still has been strong demand for such candidates, many senior candidates have spent the past number of years in a recovery role in asset servicing at an advisory firm or working on debt in the pillar banks. In addition to this, many of the candidates who only entered the market post-2007 and who should be hitting their defining years from a career perspective have had limited exposure to lending. While technically very good, they lack the business development skills needed in a competitive lending environment. There is also the developing trend which has seen most candidates (87% in a recent Lincoln Survey) have a strong preference for a move out of recovery and into lending. This probably reflects the human condition in that one would prefer to be handing out money rather than chasing people to get in the back but in reality, it is just a reflection of the changing dynamic in the market with few recovery books having more than three years left in them.

A developing trend has seen most candidates (87% in a recent Lincoln Survey) have a strong preference for a move out of recovery and into lending. 

A lot of strategies have been focused on the retail sector with an emphasis on hiring highly educated and qualified customer focused staff.  Leading Banks have been seeking a new brand of advisor – one who can make a real difference to the customer and have been actively driving change to become more customer centric. Recent regulation has pushed those offering life products to retail customers away from a bonus focused remuneration policy with an increase in base and clear career path now to the forefront of candidate attraction. We see other banks following suit as a result of increased pressure from the regulator and this may increase the barrier to entry for candidates without leading academic qualifications.

 

Investment Banking & Capital Markets

Much of the activity in this space has revolved around the soap opera that is Brexit.  We are dealing with a situation that takes its lead from political rather than economic winds, so many firms are still hedging their bets with contingency plans in place rather than outright alternatives. Working closely with the IDA we can observe that Dublin is winning and will continue to win more than its fair share of the  Brexit related pie.

Previously, I outlined the pros and cons for Dublin and at the tail end of last year, I noted the following in our 2016 review “The flow of CVs from abroad within Asset Management & Capital Markets continued apace during Q4. There has been much comment about Brexit and we are constantly being asked by candidates, clients and other interested bodies on what the climate and appetite is for more front office activity in the Dublin market. Many multinational organisations are scouting Dublin and the recurring theme is whether we have the commercial and residential property capacity and the requisite talent pool”. Suffice to say this interest has not tapered off. From June 2016, 2017 we saw a 650% increase YOY from the previous year. We have won mandates from International Investment Banks and Asset Managers in sectors that did not previously exist in the Dublin market which has opened up a completely new candidate demographic. Indeed, the large investment banks currently in the Dublin market eagerly await new entrants so Dublin can become a bonafide financial hub where talented candidates do not represent a flight risk but rather a long-term investment.

The coming months will see some exciting new functions entering the Dublin market which previously went to more established Financial Centres. Lincoln is at the forefront of recruiting in this space and are positioned to capitalise on our industry knowledge and market contacts. Please feel free to contact me on 01 6610 444 or mcostello@lincoln.ie if you would like to discuss current opportunities in the market.

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