Investment bankers in London and New York are poised for their biggest bonuses in a decade amid a huge surge in deal-making.
As the economy rebounds from the pandemic, banks are reaping the rewards from a frenzy of stock market floats and corporate takeovers, a report says.
The bonanza has boosted profits, and many are now putting big sums aside to hand out. Bonuses this year could soar by as much as 35 per cent, says consultancy firm Johnson Associates.
Deal bonanza: As the economy rebounds from the pandemic, banks are reaping the rewards from a frenzy of stock market floats and corporate takeovers, claims a new report
Many lenders froze or cut bonus pools last year because of the Covid-19 crisis. But the massive bounce back since then, coupled with rising complaints from junior bankers about long hours, means rewards are on the rise again.
Alan Johnson, managing director of Johnson Associates, said: ‘The industry has performed at a level that last year we thought was impossible.’
His firm expects investment bankers in advisory roles to see bonuses rise by 20 to 25 per cent, while those working in underwriting are set for a 30 to 35 per cent increase.
British banks HSBC, Lloyds and Barclays are among those increasing bonus pools, while Natwest is reviewing the matter.
Barclays increased its bonus pool from £749million to £1.1billion this year, while HSBC has topped up its own by £650million in the first half. Lloyds will spend an extra £100million on bonuses.
Pay is expected to rise at Wall Street banks as well. Goldman Sachs has hiked pay by £2.5billion compared to a year ago, while JP Morgan has raised it by £1.4billion.
Along with rival Morgan Stanley, the US banks have raised pay for junior bankers as well after complaints about working conditions.
The rise in bonuses is also likely to prove controversial among politicians and campaigners, at a time when the economy is under pressure from the pandemic.
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