Bank recruitment runs into red-faced factor; Only 2% of students considering career in finance; More than a quarter of students would be too embarrassed to admit to their friends that they were taking up a job in banking

May 13, 2013 8:05 pm

Bank recruitment runs into red-faced factor

By James Pickford, London and South-East Correspondent

More than a quarter of students would be too embarrassed to admit to their friends that they were taking up a job in banking, according to research that underlines the failure of banks to win over public opinion following the financial crisis. António Horta-Osório, chief executive ofLloyds Banking Group, said the result – in which only 2 per cent of students surveyed said they were considering embarking on a career in banking – was “very worrying”. Speaking at Oxford University’s Saïd Business School on Monday night, Mr Horta-Osório said the sector needed to do more to rebuild its reputation: “We want the best and the brightest to see banking as a credible career choice. This is vital for the industry’s long-term viability.”

The YouGov survey of more than 1,000 students, commissioned by Lloyds, found 41 per cent distrusted banks and financial services providers while 56 per cent trusted banks less than they did five years ago.

Mr Horta-Osório said banks had “lost sight of what was important” in the run-up to the crisis. “They became complacent, inefficient and crucially they stopped caring about their customers.” A wave of scandals over the manipulation of Libor, IT failures and alleged money laundering had left attitudes to the sector “at rock bottom”, he said.

Mr Horta-Osório quoted earlier research in which 78 per cent of respondents believed banks were critical to getting the UK economy growing again. “The bad news is that 70 per cent of those surveyed believe that ‘British banks are driven by greed’,” he added.

Business organisations have echoed complaints about the banking sector after disappointing results from the government’s Funding for Lending Scheme, which aims to boost lending to small and medium-sized businesses.

Data in April from the National Institute of Economic and Social Research showed net lending to SMEs had declined by 4 per cent a year for several years after the financial crisis. Lloyds said its own lending to SMEs had grown by 4 per cent by the year to the end of March 2013.

Peter Hahn, a banking expert at Cass business school, said that investment banking was likely to shrink over the coming years under the influence of more stringent regulation, limiting its appeal. But he added that other areas of the industry were set to flourish.

“Commercial and consumer banking is going to be reinvented, primarily because of technology and data advances,” he said.

This would leave young people with many chances for a fulfilling career in banking, he said. “Banks are going to have opportunities and they’re going to be different. In our financial system banking is and will remain absolutely central.”

Conditions in Britain’s jobs market remain daunting for young people. Youth unemployment rose to 993,000 among those aged 16-24 in the three months to January – a jobless rate of 21.2 per cent.