Bloomberg News

Bonus Cuts for 40% of Australian Bankers Outpace Asian Declines

February 19, 2013

Bonus Cuts for 40% of Australian Bankers Outpace Asian Declines

Shoppers and commuters walk through a strip mall in Sydney. Financial companies announced 108,733 job cuts last year, according to data compiled by Bloomberg. Photographer: Jack Atley/Bloomberg News

Bonuses shrank for 40 percent of Australian bankers last year, outpacing declines reported by their counterparts in other Asia-Pacific financial centers, a survey showed.

The percentage of finance professionals in Australia that saw their bonuses fall in 2012 compares with 22 percent in Hong Kong and 33 percent in Singapore, according to eFinancialCareers, a recruitment website. Australian bankers were also less likely to see their payout increase, with 28 percent of those surveyed reporting a bigger bonus, compared with 39 percent for Hong Kong and 31 percent for Singapore.

Financial firms including Royal Bank of Scotland Group Plc and UBS AG (GS:US) are reducing bonuses and headcount worldwide as they grapple with slower global growth and increased pressure from regulators to raise more capital and trim compensation. The Australian dollar’s 60 percent climb against the greenback in the past four years has made it more expensive for offshore firms to pay staff in a nation where dealmaking and share sale revenues have dwindled.

“The trend is to move away from blanket bonuses and focus more heavily on rewarding top talent,” said George McFerran, Asia-Pacific managing director for eFinancialCareers, noting that the average size of Australian bonuses rose 10 percent even as more people had their payouts cut than increased. “It suggests firms are becoming more acutely aware of the need to retain their star performers.”

Job Cuts

Financial companies announced 108,733 job cuts last year, according to data compiled by Bloomberg. Deutsche Bank AG’s bonus pool for 2012 will be 11 percent smaller than the previous year, it said last month.

Australian mergers and acquisitions fell 41 percent to $85.5 billion in 2012, the least since 2009, data compiled by Bloomberg show. The value of initial public offerings in the nation last year fell to $1.2 billion, the lowest since 2001, as concern about slowing economic growth in China and the debt crisis in Europe hurt stocks and discouraged expansion by companies.

EFinancialCareers this month surveyed 173 Australian bankers who were eligible for a bonus, according to today’s statement, which didn’t specify the number of people polled in Hong Kong or Singapore.

To contact the reporter on this story: Narayanan Somasundaram in Sydney at nsomasundara@bloomberg.net

To contact the editor responsible for this story: Chitra Somayaji at csomayaji@bloomberg.net


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