As foreign investment banks in Australia inch ominously closer to bonus season, discontent about paltry payments may trigger a surge of escapist sentiment.

Oliver Darkes, managing director, Wellesley Partners, says bonuses will be worse than 2010. Jason Hutchins, associate, Anton Murray Consulting, expects a 20 to 30 per cent decrease.

Mark Reece, manager of specialist banking, Robert Walters, adds: “Many bankers have been informed that bonuses will be flat or down significantly on last year. Comparative with last year, the market on a whole is down.”

Reece reckons plummeting payments in Q1, especially if they are even lower than expected, will make some bankers question the financial stability of their firm and make them more willing to join banks which are in a better position to pay the premium they think their performance deserves.

“International investment banks in particular have been subject to economic pressure from Europe this year, so bankers in those organisations need to have their expectations managed given the performance of the firm as a whole,” he adds.

But the job-hopping intentions of bankers may well be curtailed by a lack of vacancies, as Luke Heath, chief executive, Chandler Heath Executive Recruitment, explains: “There is likely to be subdued hiring in Q1 2012. We are working on a number of roles for Q1 that local managers believe they will have headcount to fill. But we expect some of these roles will not go ahead because of offshore restrictions.”  

Not every i-banker will be struggling to purchase that second Porsche next year. “Small sectors within the market can still expect strong payouts. High-performing teams, particularly within the resources sector, have generally produced similar results to last year and thus could expect similar bonuses,” says Reece.

And the job market is unlikley to go into a long-term decline. “When the big deals inevitably return to the Australian market, so does the competition for talent and the requirement for those with a strong investment banking pedigree. The Australian investment banker is valuable commodity and one the global banks are fully prepared to pay a premium for,” says Hutchins.