Anticipation is growing on the secure messaging services. Beyond the trading floor, most people in banking are now working from home because of Omicron, but this isn't preventing a flurry of excitement ahead of the coming bonus announcements for 2021.
Most banks announce the previous year's bonuses to employees on or around the day that they disclose their full year results. This means Friday, January 14th for JPMorgan and Citi; Tuesday, January 18th for Goldman Sachs; and Wednesday, January 19th for Morgan Stanley and Bank of America.
Within a few weeks, all will therefore become clear at U.S. investment banks. Europeans report and announce bonuses later, with most (UBS excepted) revealing their numbers in February.
It's U.S. banks, however, that are expected to be the most splashy as usual - and where bonus fervor is most apparent. "Our revenues are up 60-80%, so most of us are expecting a bonus increase of 30% to 40%," says one executive director at JPMorgan. This follows articles in both Bloomberg and the Financial Times saying that bonuses at Goldman Sachs and JPMorgan could be up 40%-50% on the levels of 2020.
However, as the charts at the bottom of this page reflect, even at the big U.S. banks there's room for considerable variation in bonus increases by region. - At JPMorgan, investment banking fees are up a solid 40%+ everywhere, but Goldman Sachs' Asian bankers have underperformed with an increase of just 12%. The biggest regional disparities are at Citi, where investment banking fees were up just 15% in the U.S. last year according to Dealogic, but by 76% in APAC ex-Japan.
While some bankers are therefore feeling assured about the coming bonus round, others are less certain. One senior JPMorgan banker told us talks with management had only been very preliminary so far and that numbers should be "firming up" soon.
The real uncertainty, though, likes in sales and trading divisions which performed well in 2021, but not universally so. One senior equities trader at Goldman in New York says the rumor is that the initial bonus pools they were allocated were a "joke" and that most people should not hold out to get paid a huge amount more than last year. "A few traders will be up 50%, but most of us will be given a message that the golden years for sales and trading are over and we should be grateful for our 10%+," he predicts.
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