It’s been a good bonus season for investment bankers in Singapore. Across the market, most are taking home 20% to 30% bigger bonuses for 2021, driven by a jump in M&A deals last year. But headhunters still note an increased interest in bankers wanting to leave for crypto or the buy-side.
In 2021, investment banks in the Republic made a record US$1bn in fees, largely through a 91.1% growth in advisory fees for completed M&A, according to data from Refinitiv.
US banks, which dominate regional M&A, have generally paid the best bonuses. JP Morgan was the top bank by M&A deal volume in Southeast Asia in 2021, with US$94.5bn, according to Dealogic’s league table. Morgan Stanley’s bankers enjoyed a resurgence as their firm rose from 13th to 2nd place year-on-year. UBS and Citi finished third and fourth, respectively, for M&A volume.
Gary Lai, Asia managing director at Charterhouse Partnership, says investment banks are “allocating a larger proportion of bonuses to reward key bankers, while recognising the majority of the other team may get poached away”.
In the face of multiple job opportunities, banks are also significantly upping base salaries to attract and retain top bankers, including the junior cohort, adds Lai.
Meanwhile, investment banks are continuing to hire aggressively on increased activity in capital markets. “Financial institutions are wasting no more time in 2022 and will be moving ahead with their business development and headcount expansion plans,” says Lim Chai Leng, Randstad Singapore senior director of banking and financial services.
However, despite high bonuses, rising pay, and strong recruitment by banks this year, Lim expects more junior investment bankers to move to hedge funds and private equity firms. Front-office talent from investment banks are also being headhunted by digital banks, fintech companies, and e-trading securities firms.
Lai from Charterhouse says crypto companies are also on some bankers’ radars in 2022. “The crypto firms have in recent periods aggressively hired senior investment bankers and have shown to be willing to pay extremely high compensation to attract these talents,” he adds. As we’ve previously reported, recruitment in the crypto sector has surged over the past year in Singapore.
Still, it’s not all doom and gloom for banks. Lai observes that a “fairly high proportion” of investment bankers are still reluctant to enter the crypto space, while seasoned bankers are unwilling to go to a direct competitor – of course, unless there is significant upside in compensation.
Photo by Victor on Unsplash