Just how bad are Asian banking bonuses looking in 2022?
If you’re a banker or trader in Asia, you might want to reconsider the size of your yacht.
A report from recruitment consultancy Options Group suggests that bonuses in Asia are likely to fall more than elsewhere this year, with a reduction of 7.8% predicted, compared to a fall of just 2.2% in the US and an increase of 1.2% in EMEA.
Worst off are investment bankers in Asia, who Options Group says expect 2022 compensation to fall by nearly a quarter compared to 2021. The figures reflect data points collected between the start of the year and early October.
Dealogic says M&A revenues fell 26% in the first nine months of this year in Asia, versus a global decline of 14%. Southeast Asian equity capital markets revenues were down 57%.
Mike Karp, the CEO of Options Group, says lower Asian bonuses are a reflection of this year's difficult markets. "Asian banking revenues in 2022 were hamstrung partly because China has been so slow this year as some banks have pulled back,” said Karp.
But Karp is optimistic about the future. “Hong Kong is opening up and things are looking up for 2023,” he says.
Jon Loh, executive director of recruitment firm Nicoll Curtin’s Singapore & Hong Kong office, is also optimistic about next year. Loh forecasts that Q1 '23 will see things “right themselves out a little more”, and that compensations will be “less volatile.”
Within sales and trading specifically, Options Group is predicting a 4% increase in fixed income sales and trading compensation in Asia this year (up 11% in FX, 10% in commodities, 5% in rates, but down 7% in credit), and a 5.2% fall in equities bonuses. In Asia, equities bonuses are expected to fall the most in cash equities, with a decrease of nearly 8% forecast, compared to a 3.5% increase in the US.
Banks in Asia have been cutting staff in response to this year's poor revenues. Morgan Stanley cut jobs in September. Goldman Sachs' Asian revenues were at a three-year low in the third quarter. Credit Suisse Singapore bankers are being cut and are fearful about losing more jobs. And bankers in China are being ejected at various firms.
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