Dour Bonuses Await SG, HK Bankers in Equities Divisions
With weaker trading revenues in 2018, banking staff in equities divisions should expect annual bonuses to fall by double-digit percentages.
If UBS' fourth quarter report card provides an indication of financial results to come, Asian bankers in global banks – especially in those in equities divisions – should brace themselves for lower bonuses this year. In particular, Asian equities traders in Hong Kong are likely to see their 2018 bonuses fall by about 10 percent compared with the previous year, says Eunice Ng, director of headhunters Avanza Consulting, who was quoted in «efinancial careers».
At UBS, equities-trading revenue fell 10 percent to $792m from a year ago in Q4 due to lower client activity. While UBS’s earnings report doesn’t provide regional figures for equities, the powerpoint presentation indicated that Asia was the main cause since the Americas held up well while the EMEA region was stable.
Tied to the Markets
Specifically, the sharpest drop in equities revenue at UBS was in derivatives, the bank's chief financial officer, Kirt Gardner, said on an analyst call. He added that structured products had become less attractive due to increased levels of market correlation in Q4.
«That was very, very pronounced in Asia Pacific where we tend to have a disproportionate share of that business versus our peers... we therefore also on a regional basis saw a sharp drop in Asia that impacted our overall equity result,» said Gardner.
U.S.-China trade tensions and the dollar strength has tanked the Shanghai Composite index and many global equity markets. «Trading bonuses typically track the market,» adds John Mullally, director of Hong Kong financial services at recruiters Robert Walters in Hong Kong.
