Salaries surge at OCBC, but Singapore banks cut headcount

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The sudden addition of scores of expensive Barclays bankers to its ranks has helped increase staff costs at OCBC and pushed up pay per head.

OCBC-owned Bank of Singapore acquired Barclays’ Asian wealth unit in November and more than 60 Barclays relationship managers (as well as other staff) joined OCBC’s headcount as a result.

Operating expenses at OCBC for the first quarter rose 5% year-on-year, according to the bank’s Q1 financial results. This was “driven by an increase in staff costs partly associated with the consolidation of Barclays”.

Staff costs rose 4%, “largely from higher base salaries”. And staff costs per head – total employee expenses (such as salaries and bonuses) divided by total headcount – went up by 5.2% year-on-year (or S$1,010), as the first table below shows.

Barclays RMs got about 10% to 15% more base pay when they moved to BoS, according to a headhunter with knowledge of the deal.

BoS is paying competitively in part to prevent its newly acquired bankers from joining Standard Chartered, the firm which poached several Barclays RMs before the takeover.

RMs at Bank of Singapore are earning their keep for their parent company. OCBC’s 14% rise in quarterly profit was largely led by growth in its wealth management business.

Despite the Barclays acquisition, however, overall headcount at OCBC fell by 312 year-on-year.

Fellow Singapore bank UOB has also cut its workforce since Q1 2016, as the second table shows. DBS bucked the trend by taking on 249 people over the same period, but the increase was purely driven by its decision to hire technology staff who had previously worked for its IT vendors.

The hiring spree that saw Singapore’s three local banks increase their combined headcount by 1,272 people in 2015 appears to have ended.

While Singapore banks haven’t made large-scale layoffs over the past year, they have reduced their recruitment rates in response to deteriorating economic conditions and they haven’t always replaced staff who’ve left of their own accord, say recruiters.

Image credit: taffpix, Getty

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