Do you work in M&A, ECM or DCM in Hong Kong? Do you want to know how your investment banking salary and bonus stack up to help you decide whether you might be better off at another firm?
We’ve averaged out Hong Kong investment banking salary surveys from four recruitment agencies to produce the table below, which shows annual base pay (in HKD) from analyst to managing director (MD) level at large banks.
How much do investment bankers earn in Hong Kong?
Analysts at investment banks in Hong Kong take home HK$675k on average, according to our analysis of pay surveys. Analysts’ salaries are rising at the fastest rate of all the five seniority levels, says Molly Gordon, an investment banking consultant at recruiters Selby Jennings in Hong Kong, adding that top-performing third-year analysts can earn up to HK$865k in 2019. Investment banks in Hong Kong are still attempting to ‘juniorise’ their workforces – beefing up their less-costly execution ranks while trimming directors and MDs.
By contrast, although directors and MDs remain well paid in Hong Kong investment banking – earning HK$2,215k on average – they have not enjoyed significant salary rises over the past 12 months. “The experienced people are now facing the toughest pay squeeze,” says a Hong Kong investment banking headhunter. “Those above VP are facing a tough time as younger, hungrier and cheaper alternatives are available in greater quantity,” he adds.
Whatever the seniority level, US firms in Hong Kong tend to pay the best investment banking salaries. By contrast, Chinese banks – which are rising up investment banking league tables in Greater China – typically pay below-average salaries. “But in the current market your bonus may make up the differential due to the higher volume of deals Chinese banks are now involved in,” says Stanley Soh, a Hong Kong-based regional country director of financial services solutions in Asia.
How big are investment bankers' bonuses in Hong Kong?
Mainland banks aside, investment banking bonuses in Hong Kong were generally poor for 2018, with an increased number of people not receiving any sort of payment. For Hong Kong bankers who did receive a bonus, however, the table also shows average bonuses (as a percentage of salary) across the five levels of seniority. You'll need to make it to MD in Hong Kong to potentially earn a bonus that exceeds your base salary. Even at director level average bonuses fall below 100%.
As a rule, 2018 bonuses were better at US banks than at European ones, largely because American firms generated better revenues last year, says Gordon from Selby Jennings. Goldman Sachs and JP Morgan came in first and second place respectively for full-year 2018 APAC (ex-Japan) investment banking revenue, according to Dealogic. Goldman shot seven spots up the ranking from 2017.
Gordon expects 2018 bonuses at European banks to be between 8% and 20% lower than the previous year. UBS, for example, trimmed its 2018 Asian bonus pool by about 8% because of a decline in equity offerings in the fourth quarter that reduced fees, reports Bloomberg. Could other European banks follow suit and reduce bonuses, particularly for equity capital markets (ECM) bankers in Hong Kong? Probably. Although Hong Kong enjoyed a bumper year for IPOs in 2018, some high-profile offerings toward the end of the year produced poor returns for investors, and there are fears that the listings bubble will burst in 2019.
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