Forget the credit crunch. With profits booming, Australia’s big banks are on track to pay out bumper bonuses.
ANZ, Westpac, and NAB all reported healthy profit increases for the year to 30 September, fuelled by strong trading gains in key areas including financial markets and treasury.
Net earnings at ANZ were up 13.3% for the period, while those at Westpac rose 12.4%. All three banks upped the amount of money they plan to allocate to employees – at ANZ salary expenses were up 9%, at Westpac they were up 6%, and at NAB they were up 8%.
Meanwhile, Macquarie, which reported its first half results this week, revealed profits were up 45% to a record AU$1.06bn. Expenditure on salaries and bonus accruals at the bank was up 33%.
Wilson HTM banking analyst Brett Le Mesurier says: “Bonuses have definitely gone up …. I’d expect those bonus levels to remain strong for those banks that don’t have sub-prime exposures,” he says.
David McDonald, banking analyst at Shaw Stockbroking, says while the banks don’t break down salaries and bonuses in their accounts, pay in wholesale banking is growing steadily.
Adam Kolokotsas, segment manager, accounting, banking and finance at Tanner Menzies, adds: “The frontline people who are doing the deals are earning 100-150% of their salaries as bonuses.”
Last year’s strong performance doesn’t mean everyone’s assured of massive bonuses, however. Kolokotsas says banks will pay out substandard bonuses to encourage some people to leave of their own accord.