Our latest Investment Banking Compensation Report shines the light on who was the biggest player during this year’s bonus cycle and who runs the risk of their talent looking elsewhere for their next opportunity. Request your copy here.
The sector was left reeling from a series of shocks in early 2023, driven by rapid interest rate hikes in response to surging inflation and a sluggish economy following the pandemic and numerous geopolitical factors. The collapse of California’s Silicon Valley Bank – the second-biggest bank failure in US history – in early spring sparked a crisis of confidence that threatened to spiral, sending a tremor through the global banking system. It was followed by the collapses of Signature Bank, First Republic Bank and Switzerland’s second largest bank, Credit Suisse (subsequently rescued by UBS), marking the largest bank failures since the global financial crisis in 2008.
Investment banking revenues plummeted in 2023 amid a hiking cycle in which interest rates soared to their highest level in decades, a lack of IPOs and a slowdown in merger and acquisition (M&A) activity. Subdued M&A activity impacted investment banking fees, leading to revenues falling to a five-year low in 2023. And it was also another quiet year for IPOs, with uncertain market conditions and fears of recession dampening plans by companies to go public.
As dealmaking and public listings dried up, banks responded to plummeting fees by slashing their workforce. Global banks collectively shed over 60,000 jobs in 2023, making it one of the heaviest years for redundancies since the global financial crisis.
But the outlook for 2024 is brightening after a promising first half of the year and there are signs of capital markets activity thawing after a two-year freeze. With inflation easing, the end of central bank hikes bodes well for M&A activity, and the improving economic outlook and likelihood of a soft landing for the global economy means that IPO activity is more optimistic. We are seeing hiring start to pick up again in the second half of 2024.
Our report reveals average base salaries and bonuses by job level from Analyst to Vice President. The results show how compensation has changed between financial years 2022 and 2023, the impact on bankers working at these institutions and their outlook for the year ahead.
We’ve been publishing our annual Investment Banking Compensation Survey since 2012, and is now the industry’s benchmarks for both bankers and hiring managers. Request your copy here.
