The most common question I get asked as a Recruitment Specialist in the Banking arena is “what is the state of the employment market and who is doing what?” Right now all that I can answer is that I am seeing a lot of high level activity amongst banks, with change afoot both at executive employee level and with strategic direction, but little has translated down to the frontline, either in growth or job forecasts.
I have sought the views of a number of bankers from various aspects of banking and invite others to contribute accordingly. So far opinions have varied slightly.
It has been suggested that the banks are underperforming in actual growth against forecast growth and this may explain why there are not the expected growth in new jobs on the frontline.
Others believe and have stated that whilst the frontline is poised for growth the credit environment is still highly cautious, resulting in a ‘wait and see’ situation.
So my questions to you are –
- What is your view as to the state of the market?
- What growth aspirations do you think banks generally or specifically have?
- How will this impact on job forecasts?
Comment's from a Commercial Lending specialist:
ReplyDeleteOver the past 6 months competition has returned strongly in the commercial lending markets as funding has become more available , better news for loan writers/consumers is that as more funding is made available pressure is then placed on both lower interest rates and credit guidelines to gain market share.
Furthermore is appears that mortgage funds that represented over $20 million in the financial markets, prior to the GFC .These funds were forced to freeze their funds when bank guarantees to the banks were put in place unfortunately.
They now appear to be in a position to re open and lend into the markets, which will again increase competition to the major banks and second tier lenders .With interest rates now appearing to stabilise over the past 3 months, this in turn places confidence in people wanting to either purchase or refinance commercial facilities.
Following the welcome regulation being put in place for mortgage brokers to operate in the industry from January 2010, this now brings to the market the professional loan writers that are serious about value adding to consumers and providing true qualified advice on the many products and services. Very similar to the changes that occurred over 10 years ago for financial planners to operate and remain in the industry.
Views from an Agri Business specialist:
ReplyDelete"On the Banking industry, it is probably showing signs of being on the turn into a "growth" phase again.
The GFC initially brought a lot of issues to the banking industry, with the cost of capital rising considerably, banks passing on increased risk margin pricing, more files moving to higher risk catergories, pulling back on sales activity and concentrating on retention. Then a number of businesses had their profit margin squeezed leading to sub-optimal performance. This in turn then led into tighter credit conditions, a ramp up in covenant breaches and a continuing retention rather than growth strategy.
In the early part of this year and despite the recent catastrophic weather events around the world, the tighter conditions seemed to have backed off a little, with some aggressive pricing and sales activity becoming prevalent again and some confidence returning in business outlook.
Already I'm questioning the 'lessons learned' view following a difficult 3 years trading."
Just a thought...... with the growth in the banking industry post GFC you would expect to see an increase in demand for the return of the human capital forced out of the industry during the downturn. From my observations that doesn't appear to be happening which leads me to think will the increased demand in our human capital capacity be driven by the traditional method of a higher "head count" or increased efficiency through process transformation, & enhanced technology???
ReplyDeleteComment from a specialist Property Finance lender
ReplyDeleteWe are in "Build" phase and that means we are actively looking for business. We have a strong focus on growing new business, but whilst the front end (sales) is actively looking for deals, the back end (risk) is remaining very stringent, conservative and selective. So there is a strong element of caution still in play.
The focus on growth is intended to be supported by more resources....of course as you are well aware, there is the old chicken and the egg game, so it's a matter of growing the book first to justify growing the team.
On behalf of Peter Jacobs Director Alphington Private Investor Services
ReplyDeleteThe banking industry is now starting to come out of the GFC. Though for much of Australia it could perhaps be called the “Global Financial Services Industry Crisis” as financial services felt the full effect and much of the country didn’t. The massive shakeout effectively eliminated all the smaller banks and non bank lenders in the market.
Australians and the government were content at the time to ensure that the big 4 banks were safe and secure. Preservation of the 4 major banks was far more important at the time than whether or not they were making high profits or providing poor service.
Once the dust settled Australians began to realise that all the smaller competitors that had built up over the previous 10 to 20 years had virtually disappeared and almost all business was going to the big 4. This gave them enormous market power and they were able to dictate terms to business and consumers alike. Through the crisis they literally stopped lending for commercial property. However, they did not take the next step and start selling property for whatever price they could get. They decided to hold on and as such many cashed up high net worth investors were frustrated at the lack of “fire sales”.
Currently the banks have started lending again but with their new found power they are able to be selective and choosy with what loans they provide. The Credit managers inside the banks also have a very heightened concern over defaults. This situation is unlikely to change over the short to medium term until the smaller banks and non banks begin to compete and start chipping away at the big 4 market share. This will probably take a few years.
Currently the 4 banks seem to have slightly different strategies and profiles. ANZ is clear on its strategy of pushing into Asia with mainstream core banking services (lending) though it seems to be spreading itself thin across multiple countries. CBA has a well oiled machine with good systems operating in Australia and as long as what you want is standard it will provide very good efficiency and effectiveness. Just don’t expect too much tailoring for your particular circumstances. Westpac is regrouping and probably struggling to catch up with integration of systems and its overall strategy is unclear. The “closure” of St George and reopening of Bank of Melbourne will be interesting to follow to see if it works. NAB has pushed hard into wealth management but this still only represents 7% of earnings and they need to sort out what they are doing in the UK.
I have been amused at the “we are all different” approach that the major banks have taken in their advertising of late. NAB broke up with everyone, CBA dares to be different and ANZ leaves the other in “bank world”. I doubt that in practice the customer sees any difference amongst the banks’ workforces and processes to back up these claims.
Thanks Simon for your thoughts, you do raise a very worthy question and it would be good to hear from others what their own experience is?
ReplyDeleteThere is no doubt that technology and systems are a key focus of all banks, get smarter systems and reduce the need for the person. However I wonder whether banks are at that stage, given it seems the need to continually improve upon what they allready have and the continuing over budget expense aligned to this.
I really appreciate your post and you explain each and every point very well.Thanks for
ReplyDeletesharing this information.And I’ll love to read your next post too.
Regards
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