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European bankers are weirdly optimistic about bonuses this year

Who in finance is getting the biggest bonuses this year?

Thanks to 2,000 respondents to our bonus and job markets expectations survey, we have an answer - the most optimistic bankers in the world (and bankers, as it turns out, are a pretty optimistic bunch) live in Frankfurt.

As the chart shows, Frankfurt-based survey respondents said they are expecting an average 15% increase in their bonus this year compared to last year. Regional deal activity might offer a clue to their optimism; investment banking revenues fell between 2022 and 2023, both globally and in EMEA, but the German market was relatively resilient according to market intelligence provider Dealogic.

People elsewhere were also optimistic. Respondents in London  said they expected bonuses to be up +9%. In New York they expected an increase of 8%. In Paris, hey predicted a rise of +7%, all above the global average of 6%. However, one Parisian (trading) director in our survey said: “times are tough,” and that his bank had informed him that paid out bonuses “will not necessarily be increased in line with results increases”.

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If London, New York, Paris, and Frankfurt are all up on the global average, what’s bringing it down? Asia. Financiers in Hong Kong and Singapore reported that they expected either declining (HK -6%) or flat (Singapore, +1%) bonuses.

Why is this the case? One equities sales & trading director for a European bank in Hong Kong was pessimistic about bonus prospects on the grounds of swelling costs and said he’d been told bonuses would fall further if his team doesn’t meet their budget. Another HK director working for the quantitative arm of a European bank simply said that “business is hurting”.

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AUTHORZeno Toulon
  • Ex
    ExecutiveSearch
    15 December 2023

    1) Wages and Inflation were up decently across the board

    2) London has seen an outflow of talent to European cities and so “average” wages for those cities should be higher vs previous years

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