Banking sector drives surge in demand for interim executives

Interim Partners’ recent analysis of the interim management marketplace shows the number of new assignments jumped by 24% during the period Q4 2009-Q1 2010. The rise was driven largely by surging demand from the banking sector where the number of assignments has grown by 44% over the last quarter.

The big increase in demand for interims from the financial services sector means they accounted for 43% of all new requirements from the private sector in Q1 2010, up from just 29% in the previous quarter.

Doug Baird, Managing Director, says: “It is amazing to see that nearly half the requests for interims from the private sector are now coming from the financial services sector. It has been a radical turnaround.”

“The banking crisis led to a huge wave of takeovers and mergers that presented interims with an unprecedented workload. To get two financial institutions properly integrated can take years. There are huge financial implications, running to hundreds of millions in terms of cost savings and increased revenues, between a well executed and a poorly executed merger. It’s fairly easy to see that hiring teams of interim managers to help get that job done properly provides excellent value for money.

“While M&A activity has been low these mega mergers in the financial services sector have soaked up a lot of the spare interim managers who have experience in integrating financial services companies. We expect demand to remain high and I don’t think it is too bold to say that pretty much all banks are looking at what they are going to do next.”

Interims working on integration projects in the financial services sector are now earning an average of £800 per day, but rates can reach £2,000. Some of the major financial institutions currently being absorbed into another organisation as a result of the financial crisis include: Lehman Brothers, Merrill Lynch, Bear Stearns, HBOS, Dresdner Bank, Barclays Global Investors, Cheshire Building Society and Britannia Building Society.

Interim Partners’ analysis also confirms that interims who can help prepare financial services companies for new regulations introduced in response to the credit crunch, and to new capital adequacy regimes such as Solvency II and Basle III are also in high demand.

Says Doug Baird: “There has been a lot of uncertainty about what shape regulatory reform of the financial services sector would take. Now that it is becoming clearer how Solvency II and Basle III will affect the sector, financial institutions are moving forward to the next stage of planning – that means more hiring of interims. Even the best resourced insurance company is unlikely to have all the internal resources they need to deal with Solvency II.”