Market trading is booming at U.S. and European banks thanks to Donald Trump and Brexit, and yet the glory days of dealing rooms the size of football pitches remain as distant as ever.
Scarred by the 2007-09 global financial crisis and a subsequent regulatory clampdown, cost-conscious banks aren't taking on more traders, uncertain whether the revival will last.
"There's no hiring spree," Jason Kennedy, chief executive of recruitment firm Kennedy Group in London, told Reuters. "Management don't know if the boom is real or not, if we're in a bubble or not. The last thing they are doing is gear up, only to find there's nothing behind it."
Last year's shocks of the British vote to leave the European Union and Trump's U.S. presidential election victory fueled a surge in market volatility and banks' trading activity, revenue and profit.
But that won't mean more traders, with banks avoiding any return to dealing rooms staffed by hundreds like before the crisis, instead investing more in automated trading.
Europe's largest bank HSBC began cutting around 100 senior jobs last month in its investment banking division worldwide, according to sources with direct knowledge of the matter, without saying how many were traders.
Germany's largest lender, the troubled Deutsche Bank, is set to scrap roughly one in five equity trading jobs under a scheme to cut costs across the globe, according to sources, and will slash pay and bonuses.
Even Wall Street's big beasts, which have profited most from the boom, are cautious about how long it will continue, with some offering existing staff juicier bonuses to prevent departures of talent rather than expanding the payroll.
"We'd always rather do more with less," said one senior source at a major Wall Street trading firm.
"We are not looking to ramp up hiring. New technology will help," the source told Reuters. "We are always looking at productivity gains. Sometime saying you're hiring a bunch of people is a sign of great stupidity."
The biggest trading gains have been in fixed income, currency and commodities (FICC). The top five U.S. banks made $10.5 billion in revenue from FICC trading in the fourth quarter, and $14.1 billion in the previous three month period.
The $24.6 billion total for the second half of last year was up 37 percent from $17.9 billion from the same period in 2015.
Only four of Europe's biggest banks - Credit Suisse , Deutsche Bank and France's Societe Generale and BNP Paribas - have reported their fourth quarter earnings so far. They too said FICC trading revenue had increased, although not as strongly as at their Wall Street rivals, and their equity trading performance has been patchier.
GRAPHIC: Big banks' trading revenue
A LID ON COSTS
In recent years, banks have hired heavily in two areas. One is regulatory compliance to handle a welter of new rules imposed by U.S. and European authorities, as well as to prevent a repeat of the pre-crisis misbehavior that earned some banks huge penalties. The other is technology to improve efficiency.
Trading is a different story. According to Coalition, an industry analytics firm, the total number of FICC front office staff - covering sales, trading and research - at the top 12 global banks fell to 17,479 last year from 18,755 the year before. That's down 7 percent on the year and marks a decline of nearly 25 percent from 2012.
Within that lies a deeper retrenchment at European banks, where FICC staffing levels have been slashed by 30 percent since 2012. That's nearly twice the rate at U.S. banks.
George Kuznetsov, head of research and analytics at Coalition, said banks are struggling to meet return on equity targets in their FICC trading operations. While he expects FICC trading revenue to rise 4-5 percent this year, banks will continue to keep a lid on costs wherever possible.
In addition, it's unclear if something similar to the Brexit and Trump effects last year will be replicated this year to keep markets volatile. "As a result, we think headcount will remain relatively stable this year compared to 2016. We don't see any significant expansion," he said.
Still, the outlook may be brightening for European banks. After years of savage cost cuts, scaling back operations and pulling out of some markets, the gap between them and U.S. banks - both in terms of headcount and revenue - will stop widening.
"There's only so much cost cutting you can do in the businesses you want to be in. Aside from one or two individual cases, the majority of strategic choice and restructuring in FICC has probably been done," Kuznetsov said.
A senior manager in equities trading at a large Wall Street bank said all his hiring was done "three years ago." While investment is still being made, particularly in technology and the online trading platform, this year he will be looking to hire only "opportunistically" when talented individuals become available.
The head of interest rates trading at another U.S. bank said automation plays an increasingly important role, and has affected up to 20 percent of headcount in his division.
Banks continue to rely on the "juniorisation" of trading desks, where senior and more expensive traders are replaced with younger, less experienced and cheaper graduates and trainees, as a means of keeping costs down.
"In the last three or four years, we've invested a lot in the 'junior population'. As a percentage of our trading business, it has materially increased," the head of rates trading said.
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