If you work in the investment banking division (IBD) of an investment bank - in M&A, or equity capital markets, or debt capital markets, you're going to have to be patient.
While salespeople and traders in banks' markets divsisions progress up the hierarchy at a pace reflecting their performance, junior investment bankers are typically promoted in lockstep. - One rung at a time, at the end of the year, as they slowly progress from being analysts, to associates to vice presidents (VPs). Traditionally, it took six years or more to progress beyond the junior analyst and associate stages.
If you've been paying careful attention, however, you will know that this is no longer the case. One by one, various banks have shortened their analyst programs and begun promoting to associate up to a year earlier. Citi and UBS were some of the first to do so. Goldman Sachs followed in 2015/2015. Morgan Stanley belatedly followed in August last year. By promoting analysts sooner than was traditionally the case, banks hope to retain them and to dissuade them from running away to work for private equity firms, which have been recruiting more voraciously than ever.
Junior bankers have good reason to want promotions quickly. As vice presidents, they get more responsibility, more exposure to clients, and more pay. As a VP in London, your combined salary and bonus will be anything from £249k ($326k) in the first year, to £338k ($443k) a few years later. Being a VP unlocks the higher levels of compensation.
After years of tweaking their promotion cycles, however, not all banks promote to VP at the same speed. Investment banking recruitment firm Arkesden Partners, says some banks regularly promote people to VP a full year before others. - Usually because they have chopped a year off either their analyst or the associate programs.
If you work for Goldman Sachs, Bank of America, Barclays or UBS, Arkesden says you can be fairly assured of getting promoted to VP five and a half years after first joining as an analyst. Morgan Stanley now takes six years, says Arkesden.
By comparison, Arkesden says Citi, Deutsche Bank and Credit Suisse typically drag their feet. At these banks, promotion to VP usually takes six and a half years. - A full 12 months later.
Credit Suisse and Citi declined to comment on their promotion cycles. We understand that Deutsche Bank can promote top-performing juniors after 5.5 years, but that six and a half years is still the norm.
“Deutsche Bank has made a number of changes to its junior banking programme in order to enhance professional development and career progression," said a spokesman in London. "This includes moving analysts from a year-end cycle to a mid-year cycle for promotion and compensation. Analyst to associate promotion eligibility has also moved from two and half years to two years.”
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