Who's getting the biggest bonuses in banking this year?

efinancialcareers.com:

It's probably not bankers at all.

We asked 2,000 of our readers to voice their opinions on the direction their bonuses are going to take for this year compared to last, and the results are pretty clear: weirdly optimistic, as the predictions were bank-by-bank.

On a sector-by-sector basis, the most optimistic people in banking this year work in sales & trading, while the least optimistic work in non-front office roles, compliance especially. Not all traders were made equal, however: macro and credit traders expected bonus increases of 27% and 19%, respectively; equities traders expected only a 7% rise.

This optimism likely reflects the fact that some macro traders have had a strong end to the year. At Citi, for example, macro trading revenues were up 12% in 2023’s Q3 compared to last year’s Q3.

In the investment banking division, M&A bankers said they expected increases of just 1% on average. Equity Capital Markets (ECM) bankers expected to be just 2.7% up, whilst Debt Capital Markets (DCM) people expected to be a more generous 7.2% up.

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This general pessimism reflects deal volumes this year. Global M&A revenues, for example, fell from $27bn in the first nine months of 2022 to $19bn in the same period of 2023, per market intelligence provider Dealogic.

Bonus expectations were more mixed for middle- and back-office roles. Whilst operations people and technologists expect a 10-11% increase in their bonuses, risk professionals expect “only” an 8% increase, finance professionals expect a 2% increase, and compliance people expect a 5% decline. Why would that be the case? Well, as one compliance director said to us, management told him to feel “lucky” that he’s got a job.

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