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London Bankers Predict 2016 Bonuses at 25% of Private Equity

  • Investment bankers expect average bonus of 24,461 pounds
  • Private-equity staff see average bonus of 104,125 pounds

Investment bankers in London’s financial center expect an average bonus of 24,461 pounds ($36,000) this year, about a quarter of the compensation predicted by employees at private-equity firms, according to a recruitment company.

Private-equity employees had the highest expectations, predicting an average bonus of 104,125 pounds, or about 71 percent of their salary, according to the survey of more than 1,000 City of London staff conducted by Astbury Marsden. Private bankers and wealth managers forecast a bonus of about 59,196 pounds, or 60 percent of their salary.

QuickTake Banker Bonuses

Europe’s largest lenders have been hurt by European Union rules capping bonuses at twice annual salary, while tougher capital requirements have prompted firms to eliminate thousands of jobs and scale back their securities operations. At Deutsche Bank AG, co-Chief Executive Officer John Cryan has said that bankers still earn too much money.

“The problem is that even those lower expectations are above what banks want to pay them,” Adam Jackson, managing director at Astbury Marsden, said in the statement published on Monday. “Investment banks could risk an outflow of key personnel if they are tempted away by the comparative largesse of private-equity firms.”

Employees in investment-management expect bonuses of 27,525 pounds, followed by staff in corporate- and stockbroking forecasting an average of 27,071 pounds, according to the survey. Traders of commodities expect 26,939 pounds. The average bonus forecast for workers across the City is about 23,196 pounds, Astbury Marsden said.

Deutsche Bank is scheduled to publish fourth-quarter earnings on Jan. 28, while Credit Suisse Group AG and UBS Group AG will report the following month. Companies usually disclose compensation figures along with their full-year results.

Deutsche Bank may cut the bonus pool at the investment bank by as much as 500 million euros ($543 million), or almost one third, as Cryan seeks to cut costs at the unit, people familiar with the matter said in October. The lender paid staff at the securities unit 1.7 billion euros of variable compensation for 2014, filings show.

“EU rules capping bonuses will have had a large part to play in this, but many banks are also reining in payments as profits remain under pressure,” Jackson said in the statement. “Private-equity firms are not necessarily bound by the same strict rules on bonuses, and this is reflected in workers’ far higher expectations.”

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