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European credit traders to see biggest bonus increase; US bankers to see biggest fall

We have yet to share the results to the eFinancialCareers bonus expectations survey, but they are coming. Soon. 

In the meantime, search firm Options Group has released its own bonus report for 2023 and if you work in European credit trading, it's good news. 

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The Options Group report is data gathered from its own survey of managing partners and product team leaders at banks in the U.S., EMEA, Asia, Latin America, Australia, and India. As the chart below shows, this survey suggested that European credit trading bonuses are likely to be up by the most this year compared to last (9.9%). And US investment banking division bonuses are likely to be down by the most (22%).

Options Group's global summary of yearly compensation changes by region and product 

Source: Options Group 

The figures above are averages. If you're a trader in Asia, there might be hope yet. Michael Karp, Options Group’s Chief Executive Officer, says there's likely to be a "high degree of birfucation" in bonuses this year. Good people will get paid. Poor and mediocre performers will get nothing at all.

Across the board, Karp says it seems that banks are keeping bonus pools flat for 2023 versus 2022. This is due to the ongoing difficulty of hiring strong people. "Limited talent pools in certain divisions could mean replacement hiring is near impossible," says Karp. Banks therefore need to make sure the best people don't leave. 

Karp says the London market will bear particularly scrutiny in the coming bonus round. Now that the EU bonus cap is being lifted, many banks in London will be free to pay higher bonuses as a proportion of total compensation. However, this would also imply that they'll reduce salaries and allowances. It may be a while before this happens. "Eventually, banks will want to lower fixed costs and seasoned staff may begin to consider moves. Natural attrition will come back to these institutions,” predicts Karp.

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AUTHORSarah Butcher Global Editor

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