Jan. 20 (Bloomberg) -- Hiring at London’s financial-services companies could come under pressure this year as firms grapple with regulatory costs and fines tied to regulatory mis-steps, according to a recruitment firm.
Job openings in London’s main financial district, known as the City, and elsewhere in the British capital dropped 42 percent to 4,095 in December from 7,056 a month earlier, Morgan McKinley said in a statement today.
Any optimism “could be short-lived if more banks continue to face hefty fines for various trading irregularities or misleading of clients,” Hakan Enver, operations director at Morgan McKinley Financial Services, said in the statement. “Any fines will bite into their profit margins and ultimately this could have a negative impact on hiring.”
Europe’s biggest banks including HSBC Holdings Plc, Barclays Plc and Deutsche Bank AG have racked up more than $77 billion in legal costs since the financial crisis, five times their combined profit in 2012, according to data compiled by Bloomberg. The total includes $20.9 billion set aside for future legal expenses.
Salaries rose 27 percent on average for people in new jobs in December, compared with 15 percent in November, McKinley said. There’s usually a “massive boost in City recruitment” in January, Enver said in the e-mail.
Separately, the Confederation of British Industry said U.K. financial firms may hire at the fastest rate since 2007 as optimism increases for banks, asset managers and insurance firms. The industry may add 25,000 jobs in the six months to March 31, Britain’s biggest business lobby group and accounting firm PricewaterhouseCoopers LLP said in a study published today.
Banks are adding compliance workers to avoid fines and the mis-selling scandals that have hurt profits, including loans insurance and interest rates hedging products.
The CBI, based in London, and PwC surveyed 87 banks, insurers, customer-owned lenders, investment managers and securities firms from Nov. 18 to Dec. 5.
“Looking ahead into 2014, we predict continued optimism in the City,” Enver said. “In particular Ireland exiting the international bailout program and returning back to the bond markets, and Greece taking better control of its finances and its economy stabilizing –- there is certain to be a positive knock-on effect on City employment.”
McKinley’s London Employment Monitor is based on its weekly records of new permanent and temporary job vacancies and candidates registering with the firm for employment.
To contact the reporter on this story: Ambereen Choudhury in London at email@example.com
To contact the editor responsible for this story: Simone Meier at firstname.lastname@example.org