Who in banking is expecting the biggest bonus this year?
After a bumper year for investment banking revenues, the 1,700 people who voted in our bonus and job market expectations survey were pretty confident: the biggest bonus increases in banking would not go to bankers.
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Although everyone who responded to our survey is hopeful of being paid more this year than last, in the front office people working in fixed income currencies and commodities (FICC) sales and trading teams are particularly hopeful. They expect bonuses to rise by an unlikely 69% compared to last year.
This seems heady at best given that reported FICC bonuses fell by 0.1% in 2023. It also follows a comparatively strong year for credit but a weaker year for rates: BCG Expand estimated that rates trading revenues were down 43% in Europe alone in the first nine months of 2024. Additionally, macro traders at Goldman Sachs specifically saw their realized & unrealized gains (not a perfect proxy for profit) fall by 78% in the first half of the year. A bonus increase of nearly 70% may be expecting far, far too much.
Investment banking professionals were also quite optimistic about their situation, with M&A and Debt Capital Markets (DCM) professionals most optimistic of all. The latter is most understandable – a recent report by compensation consultancy Johnson Associates shows that DCM bankers can expect bonuses to increase by up to 35% for this year on the back of robust issuance. American debt issuance increased by 42% YoY in the first nine months of 2024 according to market intelligence firm Dealogic.
Bonus expectations in the middle and back office were more varied. Finance professionals – involved in “regular” financial practices such as auditing and accounting – were most optimistic, unlike last year, while risk professionals were once again downbeat. That possibly just comes with the job.
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