BNP Paribas bankers have some reason to feel unappreciated
Investment bankers at BNP Paribas are doing a good job. The bank's second quarter results, released yesterday, showed pre-tax profits in the corporate and investment bank were a healthy €1.1bn in Q2 and equities revenues were 20 times higher than Q1.
Despite this, BNP's senior investment bankers may not be happy.
The bank does not appear to be accruing generous bonuses for 2009. Operating expenses came in at a record low of 43.8% of revenues in the first half, down from nearly 70% in the first half of 2008. Although operating expenses rose 64% year on year in the first half; revenues rose 139%.
Pay at BNP is unlikely to be as dire as at HSBC , where total operating costs were just 36% of revenues, but it's also likely to be a very long way behind US banks where 50% of revenues are historically allocated to compensation alone.
Despite this, French media are already complaining about the additional €1bn euros of costs, which they predict will be allocated to compensation.
Although BNP has successfully hired several people for its credit business in recent months, headhunters say its existing bankers are disgruntled and point to the recent departure of a high yield salesperson and the defection of the former European head of equity derivatives to Execution.
"BNP didn't pay very good bonuses, and nor have they increased salaries," says one.
