Investment banking offers the biggest starting salaries of any industry, but juniors are not enjoying the high life in London. Clustered close to Canary Wharf or the City in flat-shares – or living with their parents – analysts have no problem with the idea of uprooting to another European city.
“I have an EU passport, no children and no mortgage,” says one analyst working at a bulge bracket bank in the City. “If my bank wanted to move out of London, I’d be fine with it.”
Salaries for first year investment banking analysts in London are now £50-51k, with bonuses of £25-35k dependent on employer, according to figures from headhunters Arkesden.
Taking salaries alone, this works out as £3,087 net every month. The average rent for a one-bed flat in Clapham, South West London (popular among young professionals), is £1,372, according to estate agents Foxtons.
“Most of us tend to flatshare,” says another analyst in London. “It’s not exactly glamorous, but we don’t spend a lot of time at home anyway. I’m here for the prospects longer term, not the London lifestyle.”
Average salaries for first year analysts in Frankfurt are €60k (£50k under the current exchange rate), with an average bonus of €15k bonus. German taxes are higher and include obligatory pension payments and health insurance. As a result, net monthly income would be €2,911(£2,439).
Average monthly rent in Frankfurt is €1,100 (£921). Costs of living in Frankfurt are creeping up, and an influx of highly-paid finance professionals is likely to add to this. Junior bankers are unlikely to enjoy a lavish lifestyle by moving out of London.
Even so, the attitude of young bankers contrasts with that of senior employees who have long-resided in London, often have children and have invested in property – now expected to be hit by the double-whammy of falling property prices and the tumbling value of the pound.
“The decision to move for us is a lot easier,” says another analyst. “If employers end up moving to another European capital with a similar lifestyle, the choice to relocate would be easier for a large part of the junior workforce.”
Our own figures suggest international recruits dominate the junior ranks. Of the front office investment bankers with less than three years experience to register on eFinancialCareers over the past year, 44% are British. This suggests that 56% are in the UK for the job opportunities and have little in the way of loyalty to London.