Subprime crisis may dampen BFSI offers in B-schools

BANGALORE/KOLKATA: The US sub-prime lending crisis may have a ripple effect on the recruitment season at India’s top-notch B-school campuses. The investment banking domain (banking financial services and insurance), which is one of the biggest recruiters may not be the ruling flavour at campuses this spring.

According to sources, some students who worked extensively on mortgage desks in international investment banks have not been lucky enough to bag pre-placement offers (PPOs). However, the Indian Institute of Management and other B-Schools do not agree that the PPOs have seen any such impact.

Says Professor Sourav Mukherji, chairperson placement at IIM Bangalore, “As of now, we have not seen such an impact at the PPOs coming to IIMB. Since PPOs are given to students whom the companies have worked with (during the summer internship), I think the impact of global financial market uncertainty might be less. The impact might become apparent during the final recruitment, which is more risky from the company perspective than PPOs.”

Adds Prof A. Pandey, chairperson, admissions, IIM Ahmedabad, “The US sub-prime crisis may have an impact on overall hiring trends in the BFSI sector, but we don’t expect it to affect placements at our institute.”

While some expect a cautionary approach in terms of recruitment by banks and financial institutions, others actually feel that the crisis may even have a reverse effect. Says Pratyush Mulukutla, placement coordinator, IIM Calcutta, “The sub-prime fiasco has, in fact, led to a greater demand for higher quantitative skills, which is sure to augur well for Indian campuses, particularly for IIM Calcutta which is reflected in the PPOs for our students who worked for securitisation desks.”

Last year, the Rs 1-crore packages were bagged by students who were posted in international destinations of leading global investment banks. Nearly 60-70 students from a batch of 250-300 accept global postings from the IIMs. These postings come in for consulting and investment banking roles.
This trend may not be limited to management roles and senior management roles.According to the Teamlease report, the October-December quarter is unlikely to see high recruitments in the sector. Says TeamLease Services vice-president Sampath Shetty, “The US sub-prime fiasco has cautioned the BFSI sector market approach in terms of market penetration and future hiring. The interest rates going north have only further slowed down the consumer credit off take.”