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Recession-era cuts merely kept ratios of assets to employees stable as balance sheets shrank, and current ratios of compensation to earnings are well above levels that prevailed before the downturn.
September 9 -
Employment in the mortgage industry continued to grind down in recent months, and the current revival in loan volume appears likely to produce a modest reversal in the trend at most.
September 14
Bank of America's
Faced with high unemployment and weak credit demand, banks are looking to slash infrastructure that had been built for growth, and in turn are adding to a string of layoff announcements making big headlines. But not all banks have bloat in their payrolls. In fact some banks are emerging from the crisis leaner, in terms of headcount ratios, than they entered it.
At Capital One Financial, the ratio of compensation to pretax, pre-provision earnings for the 12 months ended in June was 36 percent, down 15 percentage points from June 2007. At M&T Bank, which, like Capital One, made opportunistic acquisitions during the downturn, the ratio is down 5 percentage points to 63 percent. Still, the median move for the large bank holding companies ranked here was an increase of 7 percentage points, to a median 91 percent.
Some banks were hurt by one-time or otherwise unusual events that happened to occur during the time periods considered here. Mortgage liabilities drove B of A to a multibillion-dollar loss during the year through June, for instance. But pretax, pre-provision earnings
Meanwhile, though the companies ranked here added a median of $1 million of assets per employee from June 2007 to June 2011, it appears that most of the growth came early in the period. Industrywide, the ratio of assets per employee has stagnated along with the size of balance sheets since 2008. It's easy to see why some banks are looking for cuts.
