Salary survey: Senior private banking bonuses fall

Bonuses of senior private bankers have fallen substantially in the past year, amid declining securities valuations and customer withdrawals.

Average bonuses of managing directors fell from 30% to 19%, a survey of small and medium-sized firms by the remuneration consultancy Monks Partnership shows. Headhunters said that in larger firms, where bonuses tend to be higher, the falls were often larger.

Christian Sulger-Buel, managing director of private banking recruiter Sulger Buel & Company, said: 'Bonuses even for the most successful private bankers have been slashed by 30% to 40%.'

'The experience of our firm is that only bankers whose compensation is commission-based have been able to maintain their bonus, providing their were able to generate revenues at similar levels to the previous year.'

For many that would have been difficult. The world's top private banks suffered an 8% average decline in assets under management in 2002 as well as a 4% reduction in headcount, according to Scorpio Partnership, a private banking consultancy and think-tank.

Recruiters at Private Banking Search also said bonuses had declined. However they said leading income generators were sometimes able to secure salary increases.

The Monks survey showed the median salary of managing directors was 150,000 in February this year, up from 134,000 last year. However the salaries of directors remained static at 96,000.Headhunters said the figures could be affected by small sample sizes.

Hiring in private banking has slowed considerably from its heights three years ago as the number of high net worth individuals has shrunk, alongside their once ballooning bank balances.

Recruiters says staff levels are now back to where they were 5-7 years ago. Further job losses look likely, with some saying there might still be an overcapacity of 20% - 30% of staff.

According to the team at Private Banking Search the cuts will be most notable among the smaller banks.

Sulger-Buel said that despite overcapacity and cutbacks the turmoil in the industry creates opportunity on the search side.

'In the last 18 months around 65% of heads of private banking among the major players worldwide have been replaced. This clearly creates new recruitment for heads of private banking.'