In this article, Raees Mahmood explores the quiet resurgence of compensation among London-based investment banking analysts – a sign that market confidence is cautiously returning after two years of volatility. Drawing on over a decade of industry insight and conversations with more than 100 bankers, he examines how improved deal flow, firmer retention strategies, and selective hiring are driving 5–10% year-on-year increases in total compensation. Raees also considers what this means for both analysts and employers, highlighting a shift toward performance-driven reward structures, renewed competition from private equity, and the qualities that will define top junior banking talent in the next cycle.
By early 2024, cautious optimism returned across global investment banking, with many hoping 2025 would bring a return to“blockbuster” levels of deals.
In this article, we explore how that optimism is beginning to translate into tangible shifts in compensation for London-based analysts – and what these movements reveal about broader market confidence, retention strategies, and the future shape of junior banking talent.
Drawing on more than a decade of insight into the investment banking landscape, we examine what’s driving this recovery, how sustainable it is, and what analysts and employers should take away from these early signals.
In London, bulge-bracket firms began to see green shoots in M&A and strategic advisory activity, particularly in resilient sectors like Consumer, Industrials, and Energy Transition – areas where long-term capital deployment remains robust despite macro headwinds.
That optimism has since been tempered by renewed geopolitical shocks- from “Liberation Day” to tariff tensions – which reinforced a tone of pragmatism rather than exuberance. Deal pipelines remain healthy, but many teams are asking the critical question: will these deals actually close before year-end?
In this sense, 2025 has become a proving ground for deal certainty and execution discipline. Firms are focusing less on the volume of mandates and more on conversion, turning advisory momentum into realised fees.
Despite ongoing caution, the uptick in activity has translated into a measured, but meaningful, increase in investment banking analyst compensation. After two years of flat or compressed bonuses, analysts we spoke to in M&A and Corporate Finance at bulge-bracket firms saw 5–10% year-on-year growth in total compensation this summer – a reflection of both improving pipelines and intensified retention efforts.
This shift signals an inflexion point: banks are recognising that even modest pay increases can be decisive in retaining talent amid the slow re-awakening of private equity hiring.
Despite this salary increase, the majority of conversations we had with Analysts indicated an interest in considering a “buy-side” switch. However, for the first time in two years of depressed hiring into private equity, we spoke with many individuals who were either actively in a process with a fund or had already received an offer and were waiting for bonuses to be paid before handing in their resignation.
Whilst banks have done more to compensate for top-performers and attrition has been comparatively low, we will now start to see whether paying more for top talent is enough to diminish the lure of private equity as a career.
Takeaway: As the market normalises, the compensation conversation is shifting from “how much” to “for what value.” This is a sign of a maturing post-crisis talent cycle.
The 2025 bonus uplift suggests a return to form, but sustainability will depend on:
If deal momentum continues through Q4, expect a more decisive rebound in analyst retention and selective hiring at the associate level. Conversely, if closures stall, firms may revert to cautious cost discipline by Q1 2026.
For analysts, the implications extend beyond pay. Those who can demonstrate commercial intuition, cross-sector fluency, and comfort with technology-driven deal processes will command a premium in the next cycle.
From a career perspective, this phase offers a chance to reposition – to align with teams driving activity in resilient or emerging sectors such as Energy Transition, Infrastructure, and Digital Transformation.
In other words, analysts who think like investors, not just executors, are likely to be the biggest winners in the next wave of hiring.
For now, analysts in London’s bulge bracket M&A teams are enjoying a well-earned rebound – one that reflects both market recovery and their central role in driving strategic transactions.
We have recently released our summer investment banking compensation report, where we spoke with over 100 investment bankers across the bulge brackets to gather our data. We have been collecting data for our investment banking report for the last 12 years, and now produce one of the most comprehensive investment banking compensation guides in the UK.
In this report, we provide tailored insights for Analysts, offering a comprehensive breakdown of compensation trends across top banks, including average salaries, bonus proportions, and year-on-year changes. You can find valuable information on how their earnings compare across firms like Goldman Sachs, J.P. Morgan, and Citi, along with detailed observations by bank. If you’d like to explore how your compensation benchmarks compare or understand where your career trajectory sits within the market’s next cycle, register your interest in the full report here.
