* M&A up 80 pct on deal in the resources sector
* Australia accounts for half of Asian deals this year
* Private equity deals may remain slow
* Senior bankers, with strong contacts, sought after
By Denny Thomas
SYDNEY, June 16 (Reuters) - Investment bankers are once again a hot commodity in Australia, as recovering metal and energy prices fuel multi-billion dollar deals in the resources sector.
After dodging the worst of the credit crisis that saw thousands of bankers lose their jobs in the United States and Europe, mineral-rich Australia has led Asia's dealmaking this year.
"We are looking to build the team," said Chris Knoblanche, head of global banking at Citigroup in Australia and New Zealand. "We have recently hired two new managing directors within global banking."
Most big banks, including JP Morgan, UBS and Credit Suisse, are hiring, industry sources said, reversing a trend that saw about 350 bankers, or 10 percent of the total, axed in the downturn.
The tide turned as Australia's rich natural resource sector attracted firms from China to Canada, keeping corporate advisers busy. That trend is likely to stay on course despite the collapse of a planned $19.5 billion tie-up between state-owned metals firm Chinalco and Rio Tinto Ltd.
"We think there will continue to be Australian assets that are attractive to foreign buyers, particularly in the mining and resources sector," said Anthony Sweetman, head of M&A at UBS.
Last week, China's state-owned Minmetals sealed a $1.4 billion deal to buy most of the assets of indebted miner OZ Minerals Ltd. UBS advised Minmetals on the deal.
While deal volumes across Asia have slumped this year, Australia has seen an 80 percent jump in transaction volumes, helped by the proposed Rio/BHP Billiton Ltd iron ore joint venture, according to data from Thomson Reuters.
Some $84 billion worth of deals have been announced in Australia in 2009, accounting for almost half the M&A transactions in Asia ex-Japan.
According to Thomson Reuters data, that would mean banks would earn about $525 million in fees, half of what they earned in the whole of 2008. Australian firms have also raised more than $20 billion in new equity, helping underwriters and advisors earn $527 million in fees, compared with $771 million the whole of 2008.
But while the fees are rising, no one expecting overall salaries to climb, as the parent companies of most domestic outfits are struggling during the global meltdown.
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Banks are scouring the market for industry specialists, though demand for junior jobs is slow.
"There is appetite to hire senior bankers. People are looking for bankers who can build relationships. I don't get the sense that there is demand at the junior level," said one banker who is looking to move.
"I've had at least 20 different calls in the past three weeks since my intention to leave," the banker added. The source declined to be named as he was in the process of leaving his current employer.
Boutique corporate advisers are not being left behind, with Caliburn Partnership looking to hire aggressively, while some ex-bankers are also setting up their up own shops, all pointing to a period of heightened activity.
Australia and New Zealand Banking Group's plan to bid for certain Asian assets of British bank Royal Bank of Scotland has raised hopes for more deals as some foreign firms assess the future of their non-core operations.
British insurer Aviva Plc, Canadian broadcaster CanWest and Germany's HeidelbergCement are the other foreign firms exploring sale of their Australian businesses.
Concentrated markets in several industries, including finance and supermarkets would limit deal making among Australia firms, but there will be opportunities in retail, real estate, infrastructure and mining services, bankers say.
But the optimism is peppered with some caution as Australian businesses are still concerned about earnings, and a stronger Australian dollar could derail inbound deals. The Aussie dollar is up 14 percent against the U.S. dollar so far this year.
"Australian corporates remain cautious and are seeking clarity on the 2010 earnings outlook before making significant strategic decisions," said Jon Gidney, head of M&A at JP Morgan Australia.
"Improving capital markets provide flexibility and, should we have a sustainable rally, we'd expect more activity in late 2009 and early 2010," he added.
Similarly, prospects for leveraged buyouts remain grim, bankers say. Cheap debt had fuelled a rush of private equity deals, pushing M&A volumes to record levels in 2007.
"There remains potential for private equity deals, but debt funding remains difficult," UBS's Sweetman said.
"There may be further recapitalisation deals, but the big A$10 billion transactions are unlikely to return anytime soon." ($1=A$1.24) (Editing by Saeed Azhar)