For the moment, Brexit is a big cost for banks that are moving staff and businesses out of London. In the longer term, however, it should present an opportunity to save money.
Just how much money is reflected in yesterday's high earners report from the European Banking Authority. By far the biggest number of investment banking (trading and corporate finance) staff earning €1m+ are based in the UK. And the high earning bankers in the UK are earning far more than the high earning bankers anywhere else.
We have both the numbers for average high earner pay by country, and the number of high earners in banking in each country in the chart below. The first figure is based upon our own analysis of the EBA's figures for average total compensation (salary and bonus) per pay bracket. The figures pertain to 2017, which is a while ago now, but the EBA is clearly a slow-moving beast.
As the chart shows, not only are there far more high earning investment bankers in London than anywhere else in the EU, but London's high earners earn a lot more than their counterparts elsewhere. If you're not going to be in London, you probably want to be in Paris, or maybe in Frankfurt. You surely don't want to be in Dublin.
What really sets London apart is not just the huge number of high earning investment bankers there, but the fat-tail of crazily high earners at the upper end of the spectrum. In Paris, the highest earning individual banker (unnamed) is earning €11,482,242. In Frankfurt, the highest earning individual banker is earning €6,606,211. In London, there's someone on €17,824,475 and various people on similar amounts slightly below that. Nowhere else even comes close.
What also doesn't come close, irrespective of location, is pay for the compliance and finance professionals who have demanding jobs overseeing the work of the front office investment bankers. Across the entirety of the EU, there are just 117 people working in finance control functions who earn more than €1m.
As the chart below shows, if you must work in the control function, there are some countries where you'll be comparatively better off than others - and perversely those countries aren't those where the investment banking staff are. Control staff account for a far higher percentage of €1m+ earners in Milan and Madrid than in Frankfurt or Paris.
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