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The first banks announce their bonuses this week

How was your bonus for 2023? If you work for Jefferies or RBC Capital Markets, you will know very soon. Insiders at both banks say this is the week.

Both Jefferies and RBC announce before other banks. US banks typically divulge bonus numbers early in January and pay at the end of the month; most European banks announce bonuses in February and can pay as late as March.

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As we reported a few weeks ago, there's some optimism about bonus prospects at RBC. This follows a strong fourth quarter, when profits in the capital markets business rose nearly 36% year-on-year. Spending on bonuses across the bank was up nearly 10% in Q4, and 7% for the full year. After a flurry of mid-year hiring, RBC trimmed over 500 people from its capital markets team in the fourth quarter, so it now has roughly the same number of bankers and traders that it had when the year began.

At Jefferies, things are a little different. Jefferies has been hoovering up managing directors in preparation for a rebound in revenues that has yet to arrive.  “Nobody knows for sure when the return of more normalized capital markets will actually occur. There is no doubt that there will be some pressure on margins and profitability as the lag time between investment and payback gets flushed out,” said CEO Richard Handler in October.  

Jefferies won't announce its fourth quarter results until early January. In the first nine months of the fiscal year, however, compensation spending was roughly flat despite a 3% increase in headcount and the addition of 111 new investment banking MDs. One longer serving MD said he is not optimistic about bonuses in London: "They will be terrible," he predicts. 

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Photo by Birmingham Museums Trust on Unsplash

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AUTHORSarah Butcher Global Editor

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