Banks could end 2011 on a sour note, will 2012 be any better?
As well all know; 2011 has been absolutely brutal. From boutiques to the BB’s, everyone’s sales, trading, and banking revenues were just depressing. Goldman’s Q3 FICC trading dropped 36% from last year while JPM’s slipped 30%. MS IB fees dropped over 40% from Q2, while GS saw theirs drop 33% year on year.
Despite that however, most of the BB’s were optimistic that they’d all bounce back in Q4. But then the bad news just keeps on coming:
Fixed-income trading revenue at U.S. banks may fall 12 percent from the third quarter, minus accounting adjustments, while equities drop 10 percent and investment-bank revenue will probably be unchanged.
And he’s not the only one. A lot of analysts have been racing to cut estimates on the big banks recently, Goldman saw theirs cut by a dozen analysts just this month, while JPM had theirs slashed by 14, adding that the future looks pretty grim given all the malaise in the economy.
Goldman and Morgan Stanley will struggle to paint an upbeat picture of 2012... With no sign of a clear solution to the problems in Europe and a deteriorating economic backdrop, it will be hard for the pure investment banks to predict the timing of any upturn.
Hell, even Jamie Dimon seems to have surrendered to this during his last presentation.
Anyway, we all knew that this was gonna happen. I mean it really doesn’t take a Harvard PhD to realize that our industry’s outlook is pretty fucking bleak. What I’m curious to know though is how you monkeys think 2012 will play out for banking? Will we see an uptick in performance? New hires maybe?
Personally I think this shit can go on for at least another 2 years, but for your sakes I’m really hoping that it won’t.
Side note: a couple boutiques have been killing it on the banking side, didn’t expect that at all this year.
Have a good one monkeys.
What's there to look forward to? Global economy is in the dumps and nothing the central planners do can solve the problem.
It's obvious that as long as everything is shit and confidence drops, there will be less jobs and less banks that will survive. It also means compensation will be lower which will make other industries and jobs more attractive for us I suppose.
I see no recovery in sight and just a downward spiral as we realise how hollow our financial system is.
Boutique I am interviewing with/hearing back on an offer this week said 2009-2010 hit them pretty hard, 2011 was okay but they see 2012 as a big year and are currently understaffed at the analyst level to handle the expected workload.
No idea how it plays out for MMs and BBs. One one hand, I can see financing being harder to come by for smaller companies. On the other hand, smaller companies always seem to be buying eachother up.
Just had an interview with a boutique and the partner was planning to add 50% staff over the next couple of years( ~3). He says from september 2011 it has been tough, but he expects it to get better.
I'm looking forward to a killler 2012. Just closed two new deals in the last week and the pipeline for Jan/Feb is already filling up. We're hiring three new bankers in my department because we need the bandwith. I'm in structured commodities finance.
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