2020 Intern Offer Rates

I'm pretty worried. My honest opinion is that banks are going to split one of two ways- either nearly all offers or very low offer rates.

We've already seen places like Citi/Moelis/Blair go 100% offers, which is honestly just a nice thing to do given that it's a pandemic, it's hard to fairly evaluate people at home due to differences in things like wifi and qualify of work space, and a 5 week (or whatever shorter length) internship just makes it hard to adequately judge. I'd expect places that are known for good culture and taking care of their employees (think more EBs are likely to fall here than BBs, but who knows) make the nice gesture of extending more offers just to earn some good will with the incoming hires. If historic offer rates are around 90% (which is true at lots of EBs and MMs), giving 100% offer rates only means a few more offers at the end of the day, and then they can probably count on a few people turning down their offers so I think it won't end up changing much.

The other side of the table is that this is a pandemic, and, while many banks have avoided doing layoffs until after the pandemic is over, all it takes is one look at the league tables to get scared. M&A is getting absolutely smoked. RX and S&T might be floating the ship at some places, but lots of EBs and MMs are way overexposed in M&A. Especially if banks are trying to avoid layoffs, lowering the FT offer rate is a good way to keep head count lower in the long run without hurting morale as much. Especially at a public shop that is primarily driven by M&A (ie somewhere like Evercore or even a MM like Piper Sandler), they could publicly announce they're cutting headcount by 10% by 2021 or some bogus like that to show they are doing something, but in reality that could just mean they are giving less FT offers and thus reducing the headcount a year from now. This is pretty stupid because hopefully things will be good again by next summer when ETs would start, but unfortunately banks (especially public ones with pesky shareholders breathing down their neck) may be under some pressure to cut costs and not giving offers is likely the path of least resistance to trimming headcount.

The other interesting thing is the spread in which banks are performing. GS and MS put up some of their best quarterly earnings ever, so one would think that maybe there is actually more money in the pot to go around. Unfortunately for us IB folks, most of that money was from S&T and capital raises, but who knows whether that will be reflected by just those fields getting sick return offer rates or some of that wealth might spread to IB. On the other hand, places with big lending businesses like BAML (whose earnings were down 70%) might be under big time pressure to reduce offer rates.

The morale of the story is none of us have any clue, so let's hope for the first case where everyone is nice and gives us all offers but prepare for the worst case where we all get fucked. Let's all just crush the last couple weeks of our internships and hope for the best. We'll find out soon enough regardless.

BofA just gave out offers. Close to 100% for all groups.