Financials will face major issues in sourcing the right talent for transaction banking arms in the medium term, as investment used to expand and enhance the transaction business has to be spread out across several faculties. In addition, there is also a shortage of appropriate hires in the market.
In an interview with Euromoney | Sibos Insider the CEO of transaction banking at Lloyds, as well as another senior executive, voiced concerns over the pool of available talent over the next few years.
“A major challenge facing the financials is that in two to four years time there will not be enough talent to go round the transaction banking business,” says Sumit Jamuar, managing director and global head of sales and global clients at Lloyds Bank Corporate Markets. “While there are pockets of talent, I think institutions will find it difficult to source the amount and right talent required to service one of the major growth areas in banking – transaction banking.”
Banks have slashed their headcounts over the last year, following the glut of hires in 2009 when markets became more stabilised. In the meantime, capital requirements, enforced by Basel III have meant that most of the bank’s capital has been used to reach these levels and prove its stability, meaning investments into people, markets and other areas have been pared back over the years.
To add more capital raising pain for the banks, on September 12 this year, the Independent Commission on Banking’s report by Sir John Vickers proposed ring fencing UK retail banks from investment banks, meaning capital requirements will be elevated again.
However, when Euromoney | Sibos Insider asked how the latest Vickers report will impact on headcount and Lloyds banking businesses, as one of the UK’s largest financials, they declined to make any comments.
“We are not making any comments on the Vickers report, however there are a number of concerns that are making planning ahead for business and hires difficult in the current landscape,” says Richard Dallas, CEO of transaction banking at Lloyds. “There is physical uncertainty on a macro basis, uncertain markets and customer’s intentions. Transaction banking has always been important to the wider financial’s business, but now more than ever, it is going to be more integrated and vital for the firm’s business life cycle.”
“Again, while we are not commenting on the Vickers report, there are a number of regulatory changes that make planning ahead for business very difficult,” adds Jamuar. “Since some of the impending changes are not set in stone, it’s difficult to know the impact it will have on business as there is no uniformity.”
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