It’s been a tough year for US i-banks, but headhunters are warning Aussie bankers to stick with the Yanks.
Since the start of this year, shares in Merrill Lynch have plummeted more than 40%, Bear Stearns shareholders are growling about the 38% drop in their investment, and Wall Street heavyweights like Citigroup have taken a pasting.
On the flip side, Aussie banks look relatively attractive, with shares in Commonwealth Bank up more than 20%. Westpac investors are also 15.5% in the black.
Despite falling stock and the prospect of skinny bonuses this year, Australian headhunters say US banks remain the more lucrative long-term option.
Bob Olivier, a director at the Olivier Recruitment Group, says, “There’s still plenty of cash tied to local performance [of American i-banks] and this would provide plenty of reasons for sticking with the US giants. You also have to question how long before the US banks bounce back.”
Mary Grant, principal consultant in Hudson’s banking and finance division, says that by comparison with the US firms, Australia’s own banks are big on salaries but low on bonuses – it’s not uncommon for Aussie banks to pay salaries that are twice as high as those on offer at US firms.
However, while US banks pay top performers in areas like M&A bonuses equivalent to two or three times their salary, Grant says bonuses at Aussie banks are more likely to be 50% of salary: “Over time, you’ll end up almost square by sticking with the US banks,” she says.