There are signs that, with the end of the year in sight, investment banks are cutting back on recruitment.
HSBC, which has added 1,600 staff to its global corporate, investment banking and markets divisions, said it had completed most of this year's hiring.
A European spokesman for Bank of America, which has spent 75% of the $675m (€540m) it committed to expanding its corporate and investment bank, said hiring goals had been met in some businesses.
Jonathan Baines, a director at executive search firm Whitehead Mann, said several banks were talking about hiring pauses and that the final quarter would be quiet. He said: "Even in a good year people do not like hiring in the fourth quarter. If they can postpone hiring until after the bonus round they will."
Boston Consulting 's investment banking performance index, which aggregates the profits of 10 leading investment banks, underlines the need for caution. After a strong first quarter, the index declined 51 points in the second quarter, the steepest drop since 2001. The group attributed the decline to a 26% reduction in trading revenues.
Banks last year experienced difficult second and third quarters before a recovery in the final three months. Baines said they continued recruiting. "Last year, the fourth quarter was strong and banks got away with hiring until the end," he said. Société Générale added seven bankers to its financial institutions team in November; Nomura hired seven Merrill Lynch equity derivatives specialists in December.
Equity derivatives hiring could buck this year's slowdown. Boston said the sector had strong growth potential. Barclays Capital said it would further expand its equity derivatives operation after hiring 18 people this year. Dixit Joshi, head of equity derivatives, said he saw tremendous growth over the next two years, and might fill some roles before December. "We will bring in new talent as required. The time of year is not a key consideration," he said.
However, Alex Blair, an equity derivatives recruitment specialist at Mantis Partners, said most teams were well stocked. "I don't know of any banks that will be prepared to pull out all the stops at this stage," he said.
Richard Moore, head of front office recruitment at UBS in London, said appointments made at this time of year needed to add value. He said: "There will be occasions where business opportunity and commercial opportunity outweigh the short-term cost of hiring. But most banks have a natural disposition to concentrate recruitment efforts in the first two quarters."
Job moves in the financial services sector reflect the trend. In the final quarter of last year, Financial News reported 124 moves, compared with 180 in the first quarter and 182 in the second.
Bonuses are the main impetus for hiring early in the year. After they are paid in February and March, recipients are free to resign. Before that, employees handing in their notice forego their accrued bonus for the year. This makes life expensive for the hiring banks, which often compensate the employee for the loss.
Moore said hiring in the final quarter could affect the bonus pool. He said: "The closer to the bonus round a hire is made, the more impact it has on bonus equations. At this late stage of the year, the potential return on investment from a new hire can be limited. It's often preferable to incentivise existing employees instead, and forward-plan strategic hires for the first quarter."
The head of recruitment at a US bank in London said hiring in the fourth quarter rarely made economic sense. He added: "It takes at least a month for people to get their feet under the table, by which time it is Christmas. You are paying a full year's bonus for minimal return."
However, he dismissed the idea that hiring would fizzle out in the last quarter. "We continue to hire in areas like credit, finance, operations and risk, where bonuses are a less significant proportion of the total package," he said.
Mike Hartwell, managing director of back and middle-office search firm Hartwell Buck, said operations hiring should remain strong. He said: "A lot of firms have staff level quotas that they need to complete before the end of this year."
Longer notice periods could also be an incentive to recruit sooner. Moore said notice periods at rival banks were extending to three months instead of the usual four weeks. As a result, banks that deferred recruitment until bonuses were paid in February had to wait until June before new staff could join. "Where there's a real business need, we can't delay that long," said one banking recruiter.
But in most cases the next few months will be spent planning rather than hiring. Baines said banks aimed to have their business plans in place by the end of the month, their hiring plans in place by the end of next month and hiring mandates issued in November. "The emphasis is on being able to hire as soon as bonuses are paid out," he said.