The bonfire of the bankers has only just begun

The ex-JP Morgan headhunter is delighted to be up for Woman of the Year. But there's trouble ahead – 40% of City and Wall Street jobs could go, she says
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The Independent Online

Maybe it's her training as a figure skater that gives Mary Caroline Tillman her drive.

Wherever it comes from, she's glided to the top – first at JP Morgan, and now at Egon Zehnder, one of the world's biggest search firms, and is on the shortlist for the Woman of the Year award being decided tomorrow.

Tillman laughs when I ask what her chances are of winning. "I very much doubt it. Who can compete with Annie Lennox [last year's winner]?" But she is delighted to have been nominated. "Whatever I do, it's full on – whether at work or as a mother – or a skater.

"I used to get to the ice rink by 5am – even in the winter, when it was -40C – train for two hours and then go to school." She adds, with a smile: "Then I would go back for another two hours of training after school." It was worth the freezing; Tillman made it to provincial champion and then financed her way through college by teaching figure skating. That was back in Edmonton, Alberta, where she grew up.

By her early twenties, after an MBA in finance, Tillman had handed over her blades for a corporate finance job with JP Morgan in Toronto. It wasn't long before she was off to Wall Street, moving to New York with JP Morgan, where she advised on mergers and acquisitions in the consumer-products sector. Then it was to London where she became chief operating officer of JP Morgan's European M&A business and helped build up the franchise. She was just 30 or so – no mean feat whatever your gender.

After a short career break to be at home with her young children, she was headhunted to Egon Zehnder, and has just been promoted to head its global financial practice. Now her time is spent not just recruiting, but also advising boards on their succession planning and strategy.

We meet in a small, unremarkable room at Egon's London office, overlooking Piccadilly. Tillman's manner is warm and friendly as she chats freely about how damaging the financial crash has been to the reputation of bankers, and how they must change their ways. So it's shocking when she casually lets slip that the industry is about to go through a bloodbath far worse than any predictions made so far, and which will lead to thousands and thousands of bankers and traders losing their jobs. According to Tillman, between 30 and 40 per cent of all bankers could be axed over the next 18 to 24 months; most of them from the City and Wall Street.

We know the cut-backs are going to be bad, but Tillman's prognosis is by far the worst I've heard from an insider. "The Masters of the Universe are facing a really tough time," she says. "The shake-out is only just beginning after the crash. There is a big consolidation still to come, which means there will be far fewer banks; a 40 per cent cut in jobs will be the 'new normal'. This is because of the tougher regulatory environment."

She adds that banks are already withdrawing from many activities because of the fall in deal flow as the cost of capital goes up. At the same time, access to capital is getting harder. "There will be takeovers and down-sizing as firms look to move into areas where they can make money. It's ... back to basics; plain vanilla, because the red-clawed banking of the bull market isn't there any more. You can see it already – commercial banks are going to go back to old-fashioned lending."

So her big question is, what will firms such as Morgan Stanley and Goldman Sachs do next? "The deal flow is drying up, there is less of an appetite for risk so they are going to have to look for new income – in areas like wealth management, multi-product lines – and diversify into asset management and more solid areas. It's going to be interesting to watch."

Figures out last week for the third quarter from the big US houses show just how tight trading has become. On Thursday, JP Morgan reported lower profits, while Goldman Sachs next week will unveil the second-ever loss in its history. Tillman doesn't want to say which firms might disappear or be swallowed up – after all, they might be clients – but she's in no doubt about the contraction. There are about 360,000 people working in the City and some 670,000 in New York's securities industry. If Tillman is right, that's thousands of bankers out on the street. Those Occupy Wall Street protesters may soon need to change their placards. Where's Wall Street, perhaps?

Jobs are already going. City headhunters recently reported that vacancies in September were down 19 per cent on the same month last year, while, in the US, firms have lost more than 120,000 jobs this year. Bank of America, for one, says it will cut 30,000 over the next few years; Goldman Sachs is to cut 1,000; and Nomura too has been downsizing.

So far, though, the fallout hasn't hit bonuses as hard as you would expect. "They still seem to be asking for too much," she says, citing a recent survey by It showed that financiers still expect big payouts and that the City bonus pool this year could be £7bn – about the same as last year but well down on the £11.5bn peak in 2007 – and ahead of the £3bn paid at the beginning of the last decade.

What will these Masters of the Universe do next? "That's the other big question. They are smart – can see the game is up and they are fed up. I know of about 30 to 40 of the top guys in these banks who are asking for advice. They've still got the horse-power but want out. They tell me it's not as much fun as 20 years ago ... many don't like what the crash has done to their reputations and some won't accept it."

Some want to start again, she says, as entrepreneurs, but most bankers are, "ironically, risk-adverse". Some want to go to Asia, but most of the international banks want local people as they need the language.

"And," she adds, "they can't all retrain as teachers or become entrepreneurs as many want to do. Some have managed to change course well – bankers with guts like Julian Metherell, who teamed up with Tony Hayward to create Vallares ... But most will have to be more self-aware, realise that they won't have the same influence as they have had.

"It's incredible – some want it all wrapped up in a Tiffany's box with a bow – but I'm afraid it's not like that any more. I had one banker [tell] me how he'd been at a dinner in Oxford recently and had been asked by a lady what he did. Puffing out his chest, he told her he was a managing director at a famous US investment bank, and waited. The lady picked up her handbag and moved seats, saying she didn't want to sit next to a banker."

But perhaps there's a silver lining to the crash, too. "The restructuring means a different kind of leader is emerging. They are coming from the more functional areas. You can see that, with risk officers such as Robert Le Blanc at Barclays and Marc Moses at HSBC, who are now at the top."

And Tillman claims these new guys are taking a radical approach. "I deal with boards all the time, and I know there is a new generation coming through who are not as reckless; they know the cost of capital is going to rise, that they have to define risk in different ways ...

"Boards want the finance guys, accountants, risk specialists, those with knowledge of IT and compliance; these are the future Masters of the Universe," she says. "Recruitment will also change as banks will want graduates with maths and accountancy even more than before."

Old-fashioned and boring, then, more as it used to be? "Yes, and these new bankers coming to the top are determined to show that banking can be a decent and good business."

Let's hope she's right.

Curriculum Vitae

1980-82: Mary Caroline Tillman was a figure-skating teacher in Australia for two years. (She still skates, occasionally, but just for recreation)

1985: Bachelor of Commerce, University of Alberta

1987: MBA, Richard Ivey School of Business, University of Western Ontario

1987: JP Morgan, associate, corporate finance, Toronto

1988: JP Morgan, New York

1992: JP Morgan, London

1995: Managing director and chief operating officer at JP Morgan European advisory business, London

2003: Egon Zehnder, financial services search

2011: Egon Zehnder, head of global financial practice

Children: Three – aged nine, 15 and 17

Favourite book: Atonement

Favourite film: The Deer Hunter