I’ve got a feeling that despite all my gloomy predictions at the end of last year, 2013 is going to be a good year for the City of London. I started to think that things might not be as bad as I had thought they would be when within a few days of being back in the office we started to get some interesting roles being released. Now, 17 days into the year we have about as many live roles now as I did at my busiest period at any point last year.
A healthy number of roles is always a good sign, but IT recruitment tends to be a “bellweather” for how the financial markets are doing, as opposed to an accurate indicator. For instance lots of roles in January could just be a sign that it’s the New Year and companies wanting to test the market to see what the quality is like, rather than actually having a need to hire.
Good news from the States means good news for us
But there has actually been some low level good noise floating about since the summer, I refer mainly the Oil and Gas boom in the USA. Their enthusiastic adoption of “fracking” has revolutionised their national energy landscape, which is going to help their economy recover, leading to surprising stories that the US is now a net exporter of oil and that they expect to export more oil than Saudi by 2020 flying around.
Then last week I read this article in the BBC news Bank of America to pay Fannie Mae billions to settle mortgage claims. Now that Bank of America, Citigroup, JP Morgan and Wells Fargo have settled their dispute with the US Government (Fannie Mae), the toxic debts they acquired in the lead up to 2007 / 08 will have been cleared off their liability books, which will improve their balance sheets at a stroke, meaning that they can now lend more, pay more dividends and be in a stronger position for the banking standards currently being implemented (i.e. Volcker and the rest of Dodd-Frank). Now they don’t have set aside so much capital to meet these liabilities many of the banks can start chalking up bigger profits.
And today the front page of City AM sees JP Morgan announce, alongside Goldman Sachs, that profits are up 12%. And even better news was that Goldman Sachs recorded a 19% rise in total revenues in 2012. As these two top investment bank do well, we should start to see the other banks also starting to do well. And with all the cost cutting the banks have been doing since 2011, they should be in a place where profits can come quite quickly.
Which can only mean good news for Java developers in the City of London and Finance Technology recruiters like myself. Hopefully this recent spate of jobs will be the beginning of a more successful period than recent years!
On an aside I just can’t help but think what a shame it is that whilst the US banks have been able to sort themselves out, the UK still seems to lag behind. How long do we have to wait for our own banks to move on from the quagmire of 2008?