Bonus season will soon begin in earnest in Hong Kong and Singapore. But while most investment banks will actually make their payments after Chinese New Year, a few firms have either already paid out or have at least given staff some indication of what they should expect to receive.
Here’s what we’ve gleaned so far about bonuses at global banks in Asia. As you might expect, employees at US institutions will be feeling much more content than their counterparts at European firms.
“J.P. Morgan will pay well,” says a Singapore-based headhunter who asked not to be named because of client confidentiality. “They are looking to retain and attract new talent through above-average bonuses, picking up the best of those leaving or getting cut from Barclays, SCB and Deutsche.”
Morgan Stanley has cut jobs in its Hong Kong fixed income, currencies and commodities (FICC) team recently and bonuses are not expected to be bountiful for those who remain. “In equities, MS is focusing the bonus pool on the parts of its business it’s committed to and has a long-term future in,” says a Hong Kong headhunter. “For example, some employees in prime services are being paid about 10% more than the previous year, while in its structured equities business bonuses are flat or marginally up.”
Despite a fall in final quarter global profits, most Goldman bankers in Asia are expected to receive similar bonuses to the previous year. “GS will be fine as they always keep market share,” says another Hong Kong-based headhunter. In Asia ex-Japan for 2015, the firm ranked top for completed mergers and acquisitions (M&A) and second for equity capital markets (ECM), according to Dealogic.
“I understand that Bank of America Merrill Lynch people on the M&A side will do well,” says the Hong Kong headhunter. The firm was pipped into third place for 2015 M&A revenue by CICC, but it still clinched a 17.3% market share, up from 9.2% the previous year.
Like many of its larger rivals, Jefferies has been cutting equities roles in Asia, but its advisory bankers are tipped to be well rewarded. “If you still have a job there, you will be happy with your bonus,” adds the headhunter.
Globally, Deutsche bank staff have been told to expect their bonuses to shrink at least 25% to 30%, according to Reuters. A third Hong Kong recruiter confirmed that these cuts will affect Asia, a region where the German firm has also been making layoffs of late. “Deutsche will be paying poor bonuses because of management changes and poor revenue from its institutional business. Management has indicated zero bonuses, even for some above-average performing staff in Hong Kong.”
Announcing 15,000 job cuts in November isn’t conducive to paying good bonuses a few months later on. “SCB investment bankers will have a challenging year following the departure of Carsten Stoehr,” says the third Hong Kong recruiter. “The firm’s business direction is changing, focusing more on Asian private banking. Other business areas, such as DCM, will suffer in terms of bonus pay-outs.”
It’s a similar story at Barclays as it shutters its Asian equities team. “Bonuses at most of the European banks will be awful, especially at Barclays. Paying out big bonuses in Asia wouldn’t go down well back at HQ in London. This year your bonus is keeping your job at Barclays,” says another Asian investment banking recruiter.
ThamKC, iStock, Thinkstock