UOB is rapidly closing the pay gulf with its larger local rival, DBS, according to the banks’ first half financial results.
Staff costs per head at UOB – total employee expenditure (such as salaries and bonuses) divided by total headcount – rose by a substantial 11% year on year to reach $48,143 for the first six months of 2018. By contrast, DBS spent 5% less as average earnings at the bank fell to $61,019.
The long-standing compensation gap between the two firms now stands at ‘only’ $12,875 in H2, down from $20,590 a year ago.
UOB’s H2 financial report suggests higher bonuses and technology hiring were both partly responsible for the surge in average pay. A rise in total expenses across the bank was “driven by higher performance-related staff costs and planned IT-related investments as the group continued to invest in talent and infrastructure to support its digitalisation initiatives”.
As we’ve been reporting recently, much of UOB’s recent recruitment has focused on Singapore-based technology roles. Salaries are rising more rapidly in tech than in most other functions as banks like DBS, Standard Chartered, Citi and UOB increase hiring in the face of local skill shortages and growing competition from technology companies.
UOB has also been increasing its spending on its expensive front-office employees: those working in group wholesale banking (which serves corporate and institutional clients) and in global markets (which provides foreign exchange, interest rate, commodities, equities, and other treasury products). Expenditure increases of 13% and 9%, respectively, in these two divisions were partly attributed to staff-related costs.
OCBC employees, meanwhile, enjoyed a 5% year-on-year rise in their average remuneration, fuelled by recruitment in technology and private banking.
At DBS, the 5% decline in pay per head has been driven by the addition of hundreds of lower-earning ex-ANZ employees who have come on board since DBS acquired the Australian bank’s Asian wealth and retail operations in 2016. While DBS has retained many of ANZ’s well-paid private bankers and priority bankers, the bulk of the transitioning ANZ staff work in less lucrative retail and support roles. Moreover, the ex-ANZ workforce also includes employees in China and Indonesia, not just people in the high-cost markets of Singapore and Hong Kong.
As the table below shows, however, DBS – whose non-retail front-office operations are larger than those of its rivals – remains the best paymaster among the three Singapore-owned banks.
Have a confidential story, tip, or comment you’d like to share? Contact: firstname.lastname@example.org