Banks That Are Doing Well in 2023?
Not all banks are doing badly in 2023. Though it’s been a slow start, Goldman Sachs, JPMorgan Chase and Morgan Stanley are faring better than their capital market rivals, in terms of operating revenue per full-time employee. If you’ve been stressing over investment banking and banking headcounts for 2023 / 2024, this should bring some relief to your job application strategy!
The performance improvement may well be attributed to job cuts, which GS started last year. MS is currently pursuing job cuts, so it too may catch up to GS’ performance soon. JP Morgan, however, did not mention any cuts (yet) to its investment banking division outside of Asia. Other banks, such as Bank of America implemented a hiring freeze, however, job cuts can’t be ruled out given their rivals’ current performance.
✅ For Q1 2023, Morgan Stanley saw an increase in revenue thanks to its wealth management division. Their WM division was able to make up for the decline in revenue from investment banking and trading, resulting in expectations for profit being exceeded. Revenue for MS’ WM increased to $6.6b (up 11%) versus the previous year. Citigroup also reported profits for Q1 as exceeding earnings forecasts.
The stronger focus on Wealth Management (current and future) may be attributed to more potential seen in this area as opposed to others. According to reports from Dealogic, global M&A activity, for example, decreased to its lowest rate in over a decade in Q1 2023, with volumes dropping to $575.1b by the end of March this year.
So what does this mean for students looking for careers in finance?
✅ In early Feb this year, JPM announced that in the US for example, they are going to hire 500 bankers to serve small businesses through 2024.
✅ GS, MS, and JPM especially have managed to outshine their competitors in terms of operating revenue per full-time employee. This potentially means that even though banks are taking a more measured approach to hiring, these top-tier banks could potentially offer more hope to job seekers within the year as performances improve.
✅ IBD headcount stands at about 20+ for each of the 3 banks whilst areas such as S&T/PB/AM for each bank have a headcount of about 10 – 15.
Don’t rule out other top players though:
🎯 BoA Securities recently received the 2023 global award for Best Overall Investment Bank from Global Finance. They attributed this to BoA’s commitment to ESG, its improved ranking in overall fees (it ranked 3rd in 2022 and 4th in 2021), and its IB platform which serves 95% of Fortune 1000 companies. BoA’s headcount for IBD is about 20+ and 10-15 for S&T/PB/AM.
🎯 Keep an eye out for opportunities in wealth management too, especially in Asia. As more HNWIs and UHNWIs begin to emerge in the region, banks such as Bank of Singapore are beginning to pivot their focus to such groups, meaning potential new job opportunities.
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