It's not all doom and gloom.
Wednesday’s second quarter results from Bank of America underscored the extent to which revenues from equities have improved in recent quarters.
eFinancialCareers has reported that BofA had its strongest quarter in equities sales and trading since the first quarter of 2011, with revenues rising 53% year-on-year.
Nor was BofA the only bank whose equities business benefited in the second quarter. Last week, Citigroup reported a 68% year-on-year increase in equities revenues despite announcing nearly 1,000 equities redundancies at the end of 2012.
The upturn in equities has taken banking analysts by surprise. Across Bank of America, Citi, Goldman Sachs and J.P. Morgan, analysts at Morgan Stanley were predicting a 12% year-on-year increase in equities revenues in the second quarter. Instead, the increase came in at 29%. The good quarter in equity sales and trading is being attributed to strong equities underwriting revenues and money flowing into equities assets, said analysts at CreditSights.
Strength in equities is leading banks to engage in some navel gazing, say recruiters. Have they fired too many people ? Some banks are reportedly thinking that the answer is ‘yes.’
'Banks are hiring again in equities', said Zaheer Ebrahim, executive director at search firm Kennedy Associates. 'They’ve had several strong quarters and are starting to think that they over-did the firings last year. They’ve started looking at adding headcount back in again. Hiring is happening across the board'.
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