Bank dealmakers set for bonus cheer, bond traders not so much

Tue Dec 23, 2014 11:29am EST
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By Steve Slater

LONDON (Reuters) - Investment bankers working on corporate takeovers and share issues can expect good news on bonuses when they return from the holidays after a buoyant year, but bond and currency traders face lower payouts.

Investment banks will finalize bonuses over the next two months and early signs are that average payouts will be relatively flat or slightly higher across most banks, although totals could drop at banks that have cut staff.

"We're seeing bonus pools on average up by between 5 and 10 percent on 2013 numbers, but that's massively differentiated across different businesses," said Giles Orringe, a London-based partner at executive search firm Heidrick & Struggles.

At the upper end of the range, merger and acquisitions dealmakers and those advising on debt and equity issues should see bonuses up 5-10 percent on average, industry sources said.

Taking a more bullish line, Greg Bezant, director at recruitment firm Phaidon International in Zurich, predicted bonuses could be up 20-25 percent in some areas and merger and acquisitions and private equity units should fare well.

Traders in fixed income, commodities and currencies are likely to see bonuses drop by up to 10 percent, however, after another bruising year.

Several banks are also expected to cut payouts in areas where they have been fined heavily for misconduct. Six banks were fined a record $4.3 billion for attempted foreign exchange market rigging and there have also been fines for manipulating interest rates and commodities prices and other misdemeanors.

Several banks are under more pressure than others to cut costs hard, which could see European banks being more restrained than U.S. rivals, industry sources said.   Continued...

Workers look at their phones while walking at the Canary Wharf business district in London February 26, 2014.  REUTERS/Eddie Keogh