Bankers’ bonuses set to drop this year

Emolument, which benchmarks salaries across the industry, said bonuses for traders and other staff in fixed income, commodities and currencies (FICC) were likely to fall about 9 per cent from payments made for 2014.

Bonuses in the advisory and underwriting division were likely to fall by 3-5 per cent from 2014, Emolument said, after a record year for merger and acquisitions was countered by a sharp fall in initial public offerings.

Equities traders and staff could buck the trend, however, and see a 2-3 per cent rise in bonuses after a recovery in volumes from a weak performance in 2014, the survey said.

Revenues at investment banks are expected to fall 2 percent from 2014, led by a drop in FICC trading income.

Bonuses typically reflect those trends, but banks including Deutsche Bank, Barclays and Credit Suisse are also under pressure to cut costs. New Deutsche Bank chief executive John Cryan, who was born in Harrogate, said last month pay in the industry was still too high.

Bonus pools could also be cut where banks have paid misconduct fines, while some firms are increasing fixed pay to compensate for lower annual bonuses.

“With ever more restricted bonus pools, it may be that doughnuts (zero bonuses) become more commonplace, as banks limit substantial bonus payments to key outperforming staff they simply cannot afford to lose,” said Emolument’s Alice Leguay.

Bonuses for bankers remain high compared to other industries. Emolument estimated a managing director in equities can expect to get a bonus of £361,000, while directors across the investment bank should get up to £151,000.