Now is not the time to upgrade your Ferrari: 2010 bonuses at investment banks in Australia will generally be 15 to 30 per cent lower than the previous year, according to senior headhunters.

Goldman Sachs, which delivered a 53 per cent drop in fourth-quarter global earnings last week, is expected to announce its Australian bonuses by Friday. “Goldman usually leads the way here with substantial bonuses, but from what I understand, they will be about 15 per cent down this year,” according to a recruiter, who asked not to be named.

Most other banks, with the exception of Macquarie which pays in May, will grant bonuses by the end of February. Staff at RBS are perhaps in the most precarious position. Their bank has not set a payment date as it negotiates with the UK government, its major shareholder.

“Every banker in Australia is trying to second guess each other at the moment. Everyone wants to know what other firms are paying. People are very nervous,” says Oliver Darkes, managing director, Wellesley Partners.

By why the slump? After all, the value of M&A deals in 2010 was $153bn, up 121 per cent from 2009 after a late rush in the latter part of the year. “Yes, there was a final flurry, but nothing very significant happened in M&A for about nine months and ECM didn’t have an outstandingly good year. Overall it hasn’t added up to enough,” says Darkes.

Regulatory reasons also help to explain the fairly bleak bonus outlook.

European-domiciled banks could be the hardest hit after the Committee of European Banking Supervisors ruled late last year that they can pay only 20 to 30 per cent of bonuses in cash and the remainder in current and deferred stock. The new rules are likely to affect Australia-based employees of EU banks.

“People are especially concerned at EU firms. Despite base salaries being pushed up, there seems no clarity as to bonuses in the years ahead. European regulation seems like a movable feast. The guys down here are upset at how what’s happening thousands of miles away is impacting them,” says Darkes.

EU banks could lose staff to US rivals this year. “I’ve had phone calls from very stable European banks from people wanting to jump ship to an American one. They feel vulnerable,” say the anonymous headhunter.

All of the above adds up to plenty of movement in the post-bonus season. “It will be an active market: people are willing to consider opportunities, there are holes to fill in well-established businesses, and newer firms are still building this year,” says Darkes.