Bank of America-Merrill Lynch is making positive noises about hiring in Australia as it battles to repair its battered reputation in the local employment market.

Merrill has begun a recruitment drive in Asia Pacific because sentiment surrounding the bank has “turned a corner”, according Jayanti Bajpai, co-head of APAC global corporate and investment banking.

Bajpai told the Financial Times that his firm will focus on key Asia-Pac markets, including Australia, and build scale via a revamped product range and increased headcount.

“When I first started this job, prospective recruits were sceptical about joining. In recent weeks this attitude has changed and we are finding that applicants want to join us as they are keen to be able to work in and help build a broader business,” adds Bajpai.

A spokesman for the firm would not provide details of headcount targets in Australia, but he says the APAC recruitment is “across the board”, in job functions such as investment banking, research and equities.

Senior-level statements like Bajpai's are a welcome sign and at the very least probably signal the end of savage retrenchments at the bank. But they need to be put into perspective - hiring at Merrill and the other foreign firms will be small-scale and selective for the foreseeable future.

Khalil Nasri, an investment banking consultant at the Tardis Group, describes i-banking hiring in Australia as: “opportunistic, whereby those who can afford it are interested in acquiring top talent at affordable prices. Deutsche Bank is a prime example.”

Gary Howard, an investment banking consultant at Talent2, comments: “Activity has certainly picked up, with many prepared to interview to benchmark candidates, although hiring has remained very selective and it’s certainly not a sign of a return to 2007/08 levels.”

Much of the investment banks’ recruitment is in debt restructuring, says Howard. There is some in the traditional areas of M&A and corporate finance too, but mainly for candidates with strong domestic networks.

“We have only seen a few select ECM hires, although I expect this market to be active next year as more companies look for funding or acquisitions,” he adds.

Global banks have cut too deep and now realise that they need to rebuild teams and platforms in order to execute deals properly, according to Nasri.

Howard adds: "MD hires have been made to build relationships in particular sectors where banks have lost market share and are using the current volatility to their advantage. Now is the time to secure senior executives with solid relationships and domestic experience."

Merrill has done its own strategic poaching recently, taking on Macquarie's Tim Rocks as its new Australia equity strategist and appointing Guy Foster, formerly of UBS, to lead its equity capital markets team.

But one headhunter, who asked not to be named, thinks Merrill still hasn’t repaired the damage done to its reputation in the wake of the financial crisis and the BoA takeover. “It will have to pay a premium to attract good candidates,” he adds.