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23 January 2020

UBS, Morgan Stanley cutting Asia investment bankers’ bonuses

Asia has struggled to maintain a long boom, in part as China’s economic growth has slowed to a three-decade low, pressured by the US trade war and tightening bank liquidity

Deal-making in Asia waned last year with the value of mergers dropped by nine per cent/Bloomberg

by Bloomberg

Global banks including Morgan Stanley and UBS Group are cutting investment banker bonuses in Asia after deals cooled, with senior employees taking the biggest hit.

The Asia ex-Japan bonus pool at UBS’s investment-banking unit fell about 14 per cent for last year, while Morgan Stanley’s is about nine per cent lower.

Similarly, Citigroup, which had its best fourth-quarter at the business since 2017, reduced its pool by around six per cent as it zeroed in on costs.

However, Goldman Sachs Group kept overall bonuses largely flat, though it raised spending on variable compensation for top-performing bankers.

Deal-making in Asia waned last year with the value of mergers dropped by nine per cent.

UBS underperformed last year as it took hit from being suspended from sponsoring equity sales in Hong Kong, the world’s busiest initial public offering market. The Zurich-based lender has also trimmed costs and is restructuring its businesses as part of a global revamp. Earlier in January 2020, the bank was again cleared to sponsor IPOs in Hong Kong.

Morgan Stanley cut the Asia bonus pool after lower merger and acquisition fees, the person said, with overall investment banking revenue declining about 12 per cent. The bank had a record year for the business in 2018, boosting its bonus for the region by the double digits. Citigroup’s Asia investment banking revenue rose four per cent last year.

Across the major banks, managing directors and executive directors are facing the biggest reductions of between nine per cent to 12 per cent. Bonuses for vice-presidents are largely flat, while most associates got a slight raise, the people said.

Total compensation for performing senior bankers ranged between $1.25 million to $1.75 million, depending on the geographical location and sector coverage. For junior managing directors, the range was $1 million to $1.25 million.


RELATED STORIES: Morgan Stanley UBS Group Citigroup Goldman Sachs





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