eFinancialCareers

In the latest instalment of her regular series, “From the Frontline”, our columnist examines the quiet rise of transaction banking.

A former banker, who now works as a headhunter, the author has more than 10 years’ experience at leading firms in Asia. If you’d like to look at her previous articles, please click here, here and here.

The buzz in recruitment circles these days seems to be that hiring is picking up (however cautiously and slowly). Even if investment banking does not top the charts any more, “bread and butter” banking is once again garnering the attention, as it inevitably does after any financial markets meltdown.

Banks are busy beefing up their coverage and transaction banking teams, the latter more specifically. Low-risk banking is making a comeback and is no longer considered the poor relation of its fancier and frillier cousins.

Despite all its recent troubles, Citibank still manages to clean up in transaction-banking profit and customer-confidence surveys (as compared to its closest counterparts, Standard Chartered and HSBC). So we know that transaction banking must be a different ball game – one in which even bad press and bad debts have little impact.

Because transaction bankers are back in fashion, will we soon see musical chairs in this sector on a scale that was previously the unrivalled domain of private banking and i-banking?

Well, even if we do, it might not really give the recruitment industry much of a boost. By the very networking-nature of their business, transaction banking professionals pretty much know most of the other talent available. Citi, for one, is known to hunt and hire without any help.

SCB and maybe even DBS might use headhunters, but they always have the same ones on retainer. And by the time HSBC wakes up to realign itself with market demands, the wave might very well be over (although word on the grapevine is that the firm is looking to expand its transaction teams as well).

Other significant players like JP Morgan have already gone the direct sourcing way by hiring headhunters as internal staff.

Candidates cash in

But what does all this mean for good candidates? The works: sign-on bonuses, guaranteed bonuses, target bonuses, retention bonuses.

As top management at nearly all the major banks above realise the importance of this steady, low-margin, low-risk business, they are meting out approvals for all the extras needed to attract the right talent more easily than in any other job sector.

So who are the candidates who are welcome to make a foray into transaction banking? Of course, if you know transaction banking, you will know that the list is pretty short: those with prior experience in transaction banking; crossovers from corporates; and the odd coverage or corporate banking person.

However, transaction banking has traditionally not quite generated the critical levels of interest to compel people from other backgrounds to rush in their applications. Hence we still cannot know for sure whether the list of invitees will expand if demand continues to rise.

But given the infrastructure, networks and balance sheet required to run a successful transaction banking business, the big players might very well have to keep on expanding their hiring.

Move over wealth management (with your daily press clippings of wanting to add hundreds of new hires), transaction banking is making its move – serious and silent and hopefully here to stay!