Expensive new recruits push up pay at Singapore banks

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Singapore's three local banks, led by OCBC, are becoming better paymasters as more wealth managers join their ranks.

Staff costs rose 5% year-on-year at OCBC in the first half of 2017, according to its H1 financial report. The bank attributed the increase mainly to “higher base salaries and staff costs associated with the inclusion of Barclays WIM”.

More significantly, staff costs per head – total employee expenses (such as salaries and bonuses) divided by total headcount – went up 8.3% (or S$3,193) over the same period, as the first table below shows.

OCBC-owned Bank of Singapore acquired Barclays’ Asian wealth unit in November and more than 60 Barclays relationship managers (as well as other staff) joined OCBC’s headcount as a result.

Barclays RMs got about 10% to 15% more base pay when they moved to BoS, according to a headhunter with knowledge of the deal. BoS is paying competitively in part to prevent its newly acquired bankers from joining Standard Chartered, the firm which poached several Barclays RMs before the takeover.

RMs at Bank of Singapore are earning their keep for their parent company. Assets under management increased 47% to S$123bn compared with H1 last year.

Meanwhile, staff costs and staff costs per head per head at UOB went up 4% and 4.3% respectively year-on-year in the first half. While the bank’s financial results did not outline reasons for the former rise, UOB has also been adding expensive private bankers. Its headcount of relationship managers almost doubled to 125 last year.

Despite the Barclays acquisition, overall headcount at OCBC fell by 861 year-on-year. UOB’s staff numbers remained largely flat, while DBS took on 393 people. The DBS increase, however, was driven by its decision last year to hire technology staff who had previously worked for its IT vendors.

The hiring spree that saw Singapore’s three local banks increase their combined headcount by 1,272 people in 2015 appears to have ended. While Singapore banks haven’t made large-scale layoffs over the past year, they have reduced their recruitment rates in response to deteriorating economic conditions and they haven’t always replaced staff who’ve left of their own accord, say recruiters.

Image credit: BDoty, Getty

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