December 1, 2023

Investment Banking

Let Your Investment Banking Do The Walking

Bank bonuses by business for 2023: the definitive guide

2023 is wrapping up, and banking bonus season is approaching. This means the measuring stick is coming out.

Both market intelligence provider Tricumen and Wall Street compensation firm Johnson Associates have reports out today. Tricumen’s calculates operating revenue per full-time employee (FTE) per business and per bank versus last year. Johnson’s is a straight-up bonus forecast.

While Johnson Associates’ forecast suggests bonuses will be poor almost everywhere, Tricumen’s operating revenues per head imply better news for bonuses in particular business areas. As the chart below shows, Tricumen says revenues per head were up significantly in equity capital markets, debt capital markets and rates trading in the first nine months of this year compared to last. This should feed through to bonuses. 

Source: Tricumen

However, Johnson Associates’ estimates of bonuses for high level business areas, shown in the chart below, suggest instead that bonuses will be down by up to 10% in underwriting roles and that variance on last year will be between -5% and +5% in fixed income sales and trading. 

Investment banking division bonus predictions for 2023

Source: Tricumen

Tricumen’s data suggests that in the Investment Banking Division (IBD), it’s capital markets bankers who should be getting a big lift, whilst M&A bankers will likely suffer. ECM bankers especially saw a 26.1% increase in revenues per head for the first nine months of the year, whilst DCM bankers lagged slightly behind (although still performed strongly) with a 14.7% increase.

M&A, which fell by 12.5%, might be the big gulping noise in the room. Tricumen estimates that M&A banking revenues per head. The chart with the arrows at the bottom of this page (also from Tricumen) suggests that the pain in M&A will be particularly acute at Deutsche Bank, where revenues are down the most. 

Johnson Associates are predicting M&A bonuses will fall by between 20% and 25% on last year.

2024 Fixed Income trading bonuses

Source: Tricumen

Among Fixed Income, Currencies and Commodities (FICC) trading, it’s a mixed bag. Johnson Associates estimates that someone in fixed income should expect their bonus to move either 5% up or 5% down.

Tricumen says that on a revenue per head basis, currency traders saw a pretty steep decline in performance, as did commodities traders. Credit trading was flat, but rates traders that picked up the slack, increasing revenue per head significantly. The arrow chart below suggests that Wells Fargo’s rates traders are best placed of all.

2024 Equities trading bonuses

Source: Tricumen

Tricumen says revenues per head for equities traders were more or less flat year-on-year in the first nine months of 2023. An uplift in prime services revenue, however, was not enough to offset the significant decline in equity derivative traders’ revenues per head. Johnson Associates is also pessimistic: it expects equities bonuses to fall between 5% and 10%.

As the chart below shows, RBC’s cash equities, Morgan Stanley’s equity derivatives and Goldman Sachs prime brokerage people look well placed at bonus time within equities businesses. 

Bank by bank performance by business

Source: Tricumen

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