IT IS a muggy Tuesday afternoon in Edinburgh and the army of financial services workers clustered in the West End are leaving their offices with their heads bowed.
Unemployment figures out the next morning are expected to hit a 12-year high and the sense of collective depression dogging the city has thickened as talk in Teuchters, the after-work favourite among the city's financiers, turns to the possibility of further job losses.
But just a few hundred metres away in a small, freshly painted office in Melville Street, a small party of bankers are, unusually for the current climate, preparing to toast their success.
These lucky few are the most recent employees of boutique investment bank Shore Capital, which last week celebrated the official opening of its Edinburgh office.
The bank's founder and executive chairman Howard Shore has flown up from London especially for the event, and as he jokes around in the main boardroom he's clearly in the mood for a party.
Leaning back in his chair, he chats animatedly about the weekend he has just spent at the Queen's Club, where he is a member. While most bankers are currently trying to keep a low profile, it's easy to forget in Shore's company that we are in the grip of a recession. Describing himself as an "unashamed capitalist", he makes no attempt to mask signs of his influence and wealth. Last weekend he had tickets for the final of the Aegon Championships where Andy Murray cruised to victory over American James Blake, and he is looking forward to attending the Wimbledon final on 5 July. He is hoping to see his long-time favourite Roger Federer claim the Wimbledon title after losing out to Spaniard Rafael Nadal last year and he sharply dismisses suggestions that the former world number one's career is nearing an end. "Let's not forget that Federer got to the final of Wimbledon last year, he won the US Open, he reached the final of the Australian Open and he has just won Roland Garros," Shore says defensively. "For a man supposedly in decline, that's not bad."
Unlike most banking executives who can be rigid and suspicious in the company of the press, Shore speaks with the relaxed, self-assured air of someone who has done well out of life and knows it.
It's little wonder given that he set up Shore Capital in 1985 when he was just 25. Back then, he started out with an investment of 10,000 but he quickly gained the trust of the City and now the bank has a market capitalisation of 66m. Well connected within the Square Mile, today Shore is considered one of London's biggest movers and shakers.
Recently he set his sights on domination on this side of the Border, opening an office of research analysts to service the local fund manager population. Opening its doors in December, it was a bold move considering that just months earlier Royal Bank of Scotland had gone cap in hand to the government, and HBOS was forced to submit to a takeover by Lloyds Banking Group. To outsiders, it appeared a risky time to be opening a Scottish branch when dark clouds were hanging over the future of Edinburgh's financial services sector.
But Shore insists the timing could not have been better. With competitors straining under the weight of the financial crisis, he was able to entice several high-profile analysts to jump ship, and he poached a team including Richard Sloss, Andrew Keith and David Philips from Landsbanki Securities. With investors' faith in large corporates at an all-time low, Shore says smaller investment banks such as his own have been able to snatch market share.
He says: "We knew there was a lot of tailwind in terms of support for dealing with independents rather than just large, integrated investment banks. As long as you are reasonably well established and have a decent name people more than ever seem happy to deal with independents. In fact they enjoy that in some cases in contrast to the big houses."
The Edinburgh team, made up of half a dozen staff, has hit the ground running and has already won a "significant" level of business. Shore is keen to build on that success and is currently on the hunt for more analysts to expand the Scottish branch. He is hopeful that given the number of job losses in the Square Mile, the Edinburgh office will be able to attract City high flyers who are in search of a change in lifestyle.
Policymakers and bankers based in Scotland have expressed concerns that it will be harder than ever before to tempt leading financiers up to Scotland in the wake of the HBOS and RBS crises. There are fears that last year's events have caused irreparable damage to the reputation of Edinburgh as a financial centre and some leading figures within the industry have reported growing antagonism towards Scotland when they have travelled to board meetings south of the Border.
Shore is much more optimistic, saying the problems at RBS and HBOS were more keenly felt locally as so many people's livelihoods depend on the two institutions. "In London and globally there's more of a view that it is a very strong, deep-rooted financial community in Edinburgh. It has had a couple of high-profile issues to deal with but you know it will get through it and in the long term Edinburgh will stay and thrive as a financial sector. It always affects you more when you're on the inside.
"It was just really unfortunate that it happened to be both of them at the same time when they are probably the most effective of the major British banks. It's an unfortunate coincidence. Of the top five or six banks it could have been any of them."
Although he has worked in the banking industry for the better part of 30 years, Shore doesn't consider himself a banker. He refers to himself as an "entrepreneur interested in finance" and when the Cambridge University graduate is not talking about sport, his favourite pastime is to wax lyrical about how the government can make the UK a more attractive place in which to do business.
A Conservative party donor and acolyte of David Cameron, his face lights up when the opportunity presents itself to discuss Alistair Darling's policies as Chancellor and what the next government needs to do to get the UK economy back on its feet.
"I'm going to bore you now," he says playfully before setting out his priorities for the next Chancellor of the Exchequer. Top of the list is cutting down on the "massively over-bloated" public sector – a sentiment that shadow chancellor George Osbourne also expressed just one day earlier. "It's far too big," says Shore. "Whoever comes into power has to cut the government sector and people have got to wake up to that reality, I'm sorry to say."
But he saves his biggest rant for the new tax rate on high earners which Darling announced in his most recent Budget. In the short term Shore predicts it is unlikely to make much difference as most people in the City expect a Conservative government to reverse the move. But he warns that in the long term, if not reversed, it will cause a mass exodus of the many highly skilled foreign bankers and analysts upon which UK financial services institutions so heavily rely. "I don't know if you have ever sat in the dealing room of one of the bigger (investment] houses but people come from everywhere. They are adding up lifestyle, job opportunities, cost of living and net income. It all goes into the equation when deciding to work in the UK. Why remove a competitive advantage or why create a competitive disadvantage when it is such an important component to the economy? How much extra tax does it raise? Very little, we know that. It's purely a politically motivated move which can damage the real economy. It's the single most dangerous thing this government has done recently."
Most bankers shy away from showing their political colours but Shore is out and proud as a Tory voter. He believes many in the City are coming round to his way of thinking. "Well, I have never been a fan of Labour, that's obvious. But I think we would all be surprised if there's not change of some sort at the next election."