London bankers’ bonuses cut sharply

The slowdown in mergers and acquisitions (M&A) activity last year hit the UK banks that service these deals. Last year, global M&A volume fell by a third, and in the first half of this year – by another 42%. This led to a reduction in bonuses in banks by 13-28%, depending on the position of the banker. However, despite their sharp decline, the base salary in banks continued to grow last year.

According to the estimates of the international consulting and recruiting company Dartmouth Partners, cited by the agency Bloomberg, the reduction in commissions in investment banks led to a sharp decrease in the bonuses of London bankers. Dartmouth interviewed about 250 bankers in various positions at UK banks and the London offices of international investment banks.

Most of all, monetary rewards fell in the London office of the American investment bank Goldman Sachs – for vice presidents, the reduction was 25%, for partners – 28%.

On average, the vice presidents cash remuneration in 2022 decreased by 13% compared to 2021 – from £429.7 thousand to £372.9 thousand. senior partners the reduction averaged 15% – from £313.3 thousand in 2021 to £264 thousand in 2022. At British bank analysts cash remuneration decreased by 16% – from £138.1 thousand in 2021 to £115 thousand in 2022.

The only category where cash rewards increased last year was junior partners: if in 2021 they received a bonus of £156.9 thousand, then in 2022 – £159.9 thousand, which is 2% more.

The study mentions banks such as Goldman Sachs, JP Morgan Chase, Bank of America, Morgan Stanley, Deutsche Bank, Citigroup, Barclays, UBS, and BlackRock investment fund. It is noted that against the backdrop of a significant reduction in bonuses last year, the basic salaries of investment bankers nevertheless increased, although it is not reported by how much.

By data Dealogic, the global M&A market fell 37% last year to $3.66 trillion. A year earlier, the volume of this market reached a record $5.9 trillion. Analysts attributed the slowdown in activity in 2022 to rising geopolitical tensions and uncertainty about the immediate outlook for the global economy. According to Bloomberg estimates, in the first half of this year, global M&A volume fell by 42%.

In June FT reported that due to the reduction in the number of transactions, banks around the world received only $ 12.8 billion in commissions and other fees for transactions in the first half of the year – this is 35% less than a year earlier.

Evgeniy Khvostik