Wall Street Investment Banks Year-End Bonuses Expected to Increase by Over 30%, 'Largest Scale in 10 Years Anticipated'

[Image source=AFP Yonhap News]

[Asia Economy Reporter Park Byung-hee] Year-end bonuses in the U.S. Wall Street investment banking sector are expected to be generous this year. This is due to a significant increase in M&A advisory fee income for Wall Street banks, driven by record-high levels of mergers and acquisitions (M&A).

Major foreign media outlets reported on the 9th (local time), citing consulting firm Johnson Associates, that year-end bonuses in the Wall Street investment banking sector are expected to increase by 30-35%, marking the highest level in 10 years.

Johnson Associates also predicted double-digit bonus growth across most Wall Street business sectors, not just investment banking.

This is because the U.S. economy has rapidly recovered from the COVID-19 recession phase, leading to a sharp increase in U.S. bank earnings.

On the 13th of last month, the largest U.S. bank, JP Morgan Chase, announced that its net profit for the second quarter of this year reached $11.95 billion, more than 2.5 times the $4.69 billion recorded in the second quarter of last year.

Accordingly, unlike last year, year-end bonuses this year are expected to increase significantly. Last year’s year-end bonuses were the same or even lower compared to 2019.

Johnson Associates also forecast that bonuses in the equity brokerage sector will increase by 20-25%, and bonuses in asset management, hedge funds, and private equity sectors will rise by about 10-15%. On the other hand, bonuses in bond management and retail sectors are expected to remain at similar levels to last year.

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