Bulge Bank Headcount Index – Q4/2017

Though still tracking at levels last seen in early 2007, Alphacution’s index of “bulge bank” headcount – updated through year-end 2017 – continues to walk a tight rope of relative stability as it has continued to do so for most of the past 8 quarters (see exhibit below). This news also seems to track with the prevailing belief and commentary that the US economy is in relatively good shape – if not, at least, stable.

As always, a look into the details – and specific banks – yields a more vivid story: For starters, and including Wells Fargo & Company (WFC), 5 of the 10 banks in this analysis are within 5% of their maximum headcount over the past 45 quarters. (Goldman Sachs and RBC are within 1%.) Meanwhile, with the index down approximately 150,000 employees from its high water mark in mid-2011, Citigroup and BAML have shrunk by 166,000 and 81,000, respectively, from their maximums. Rankings of individual bank headcount indices can be found below…

WFC, the largest US bank by headcount, is a notable addition to this analysis for at least 2 reasons: From a high level, it is remarkable that total staff has not changed more than 1% over the 10 years since it was maxed after absorbing Wachovia – and since the recent account fraud scandal. However, upon closer inspection, WFC may be on the cusp of an unusual turn; one that seems to have played a role in the persistent downward trajectory of headcount at both Citigroup and BAML (see exhibit below).

Now, the question that we are asking ourselves – and one that we will focus on in this year’s Global Banking study – is whether the decline in headcount among the largest US retail-oriented banks is operational (with technology and the pervasiveness of automation), or economic (having more to do with underlying fundamentals).

Stay tuned…

By | 2018-02-28T16:29:07-05:00 January 16th, 2018|Alphacution Feed|

About the Author:

Paul Rowady is the Director of Research for Alphacution Research Conservatory, a research and strategic advisory platform uniquely focused on modeling and benchmarking the impacts of technology on global financial markets and the businesses of trading, asset management and banking. He is a 30-year veteran of the proprietary, quantitative and derivatives trading arenas. Contact: feedback@alphacution.com; Follow: @alphacution.