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 Spurred into action by falling revenue, mounting losses and the need
to convince regulators they are no longer "too big to fail", banks
across the globe have shrunk radically since the 2008 collapse of
U.S. bank Lehman Brothers sparked the financial crisis.
Last year, the tide of bad news began to turn for European banks,
which are among the region's largest employers.
Helped by recovering economies and receding fears for the euro
zone's future, the benchmark Stoxx Europe 600 Banks index <.SX7P>
rose 19 percent, outpacing the 17.4 percent increase in multi-sector
stocks.
But despite the improved outlook, Europe's 30 largest banks by
market value cut staff by 80,000 in 2013, calculations by Reuters
based on their year-end statements showed.
Recruitment consultants warn workers' hopes for a turnaround this
year could be misplaced, bad news for countries like Spain where
tens of thousands of bank layoffs have helped drive unemployment to
26 percent.
However, while painful for the people who have lost their jobs, the
reduction of large banks' workforces through a combination of asset
sales and redundancies means banks won't have as big an impact on
overall employment in future crises.
Antoine Morgaut, chief executive for Europe and South America at
recruiter Robert Walters <RWA.L> does not expect the industry's
employment to ever return to what it was in its heyday of 2008.
Then, the 25 of the top 30 banks with comparable figures employed
about 252,000 more than the 1.7 million they do today. "It's been a
bubble for 20 years," said Morgaut.
"In specialty areas we are seeing a bit of an upside but it is quite
marginal and it will stay like that for the next six to nine
months," he added.
BIG-TICKET RESTRUCTURING
The most dramatic of last year's job cuts came from major
restructurings, such as Spain's Bankia <BKIA.MC> which shed 23
percent of its workforce to help meet the conditions of its 41
billion euro ($56.9 billion) European rescue.
Italy's Unicredit <CRDI.MI>, which reduced the highest number of
staff, 8,490, said in its annual report that some of the reductions
were the result of a project to outsource IT functions to joint
ventures.
Belgium's KBC <KBC.BR> cited asset sales as a major reason for its
7,938 reduction in headcount, 22 percent of its workforce. The
bailed-out bank sold Russian offshoot Absolut Bank and Serbian
business KBC Banka. Staff figures for Absolut Bank were not
available, while KBC Banka's most recent figures show 501 staff at
the end of 2012.
Spain's BBVA <BBVA.MC> also cited asset sales as the driver of its
6,547 reduction in staff, or 23 percent of headcount, which came in
a year when the bank sold operations in Latin America.
At Bank of Ireland <BKIR.I>, where a 6.3 percent fall in headcount
was the fifth-largest in the region, a redundancy program was the
main reason.
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The pace of staff reductions approximately halved last year and most
banks are now coming to the end of disposals and cutbacks agreed
during the crisis.
However, upcoming European Union-wide tests on whether banks need to
hold bigger capital cushions could trigger another wave of asset
sales and cuts.
Routine streamlining continued last year. HSBC <HSBA.L> the biggest
employer in the pack, cut headcount by 6,525, or 2.5 percent of its
global total. The bank came through the crisis without a bailout,
but has slimmed down over the last three years by closing or selling
dozens of businesses.
Only three of the banks — Barclays <BARC.L>, Handelsbanken <SHBa.ST>
and Deutsche Bank <DBKGn.DE> — added jobs last year, and those
totaled less than 770.
POCKETS OF GROWTH
Banks are hiring in a few areas, however, with some recruiters
citing rises in specialist compliance roles such as anti-money
laundering, cyber security and internal audit as lenders have to
deal with increasing demands from regulators determined to avoid a
repeat of the crisis.
"The regulatory pressure is a cost drag on the banks but if a role
is required by the regulators, then all senior management can get
out of the way, and you can pull the trigger and hire that person,"
said Hugo Gordon Lennox, a managing director at Webber Fox, a UK
quantitative and risk management recruitment specialist.
Others said banks were beginning to address problems created by
previous cutbacks, particularly amongst the sparse ranks of more
junior employees.
"As business picks up, firms often find themselves with quite
specific and definable skills gaps in certain areas and banks have
definitely started to try to address that," said David Leithead,
managing director for banking and financial services at recruitment
firm Michael Page <MPI.L>.
Even so, big jumps in the numbers employed by banks could take a
while to come. "It's the whole oil tanker analogy — it's slow to
stop and slower to speed up," said Miles Stribbling, director of
strategic partnerships and head of Phaidon Consulting Services UK at
recruiter Phaidon International. ($1 = 0.7201 euros)
(Editing by Erica Billingham)
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