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Russian disarray is every EM firm’s opportunity

Banks looking to recruit to their emerging markets business should not fall into the trap of pigeonholing bankers that have careers in specialist markets.

The job cuts at Sberbank that this newspaper revealed on Monday show how badly the Russian bank has been doing in international markets since sanctions hit and the oil price tumbled. Four managing directors and three other front office staff were made redundant in the last fortnight at the firm.

That may be no surprise given how many Russia specialists at international banks have been cut in recent months. But it would be foolish for the firms looking to hire — First Gulf Bank, National Bank of Abu Dhabi and Banca IMI among others — to neglect what might be some bargain hires from either the pool of out of work ex-Russian bank employees, former Russian so-called specialists, or even those still at Russian banks who must be wondering when the axe will swing.

After all, Sberbank’s casualties cannot take the blame for EU and US sanctions against Russian firms, nor the tumbling oil price. And who could have blamed bankers for joining Russian firms a few years ago? Their businesses were growing and they were paying staff great big hunks non-deferred cash, just like the good old days.

There is no reason why banks should not look closely at bankers associated with the Russian markets. After all, bonds behave like bonds in any market.

There was some surprise when Jonathan Segal left Gazprombank to run Middle East and Africa DCM at Mitsubishi UFJ in May. He had long experience in CEEMEA markets before that.

To listen to some market peers speak at the time you would think Segal could only communicate using cyrillic script. But what Mitsubishi knew was that Segal knew markets and how bond businesses work.

It is the same for syndicate bankers, sales-traders and other risk taking jobs and for senior management of coverage desks. Knowing the esoteric risks of a given market is helpful but easily learned with experience. It is knowledge of the capital markets overall though that is most important. Those skills can be applied to any market whereas knowledge of what happened to two year Qatari government bonds on May 3, 1996 is so esoteric as to be of little use to anyone. It is the wider skills that firms should worry about.

Firms who take this view will be able to pick up experienced employees who want jobs — or more secure jobs. Those that stick to the blinkered idea that they need someone who has done the exact same job before for another firm are doomed to paying up for the privilege.

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