The financial rewards for working at a leading banking institution are substantial, with six-figure incomes attainable before you reach your thirties. Read on to learn about the rewards culture in the banking sector. 

he jobs are competitive, the work is demanding – it naturally follows that the rewards of the banking industry are among the most lucrative in the world.

According to the High Fliers’ Annual Review of Graduate Vacancies and Salaries 2016, graduates entering investment banking can expect to receive a starting salary in the region of £47,000 – the highest median starting salary in 2016 out of all sectors. Banking and finance is also third from the top of the list with an average starting salary of £36,000. High Fliers report that investment banking salaries increased 4.4% from last year which works out at around £2,000!

The benefits across the finance sector are substantial, with year-end bonuses sometimes even outpacing basic salaries. Many top investment banks operate a meritocratic culture, where staff are rewarded in proportion to work put in or results achieved.

Bonuses typically start at a fraction of basic salary, starting from 10% for entry-level analyst roles but these percentages climb with career progression. In front office roles, bonuses often increase exponentially, with the senior-most staff known to cap their years off with up to 200% of their salaries.
The other customary benefits may seem slight in comparison, but they still make for attractive furnishings to reward packages. They can include low-cost travel season ticket loans, social events, gym memberships, bike schemes or golden hellos.

However, it is especially important for graduates to note that the annual salary provided by an employer is not the actual amount paid into a bank account each month. There are a number of payments that will be deducted from a monthly salary including student loans, national insurance and income tax.

There are tools out there that can help an individual understand their actual take home salary in more detail, such as RBS’ salary calculator which allow graduates to calculate their take home pay after all of the applicable deductions have been made.

Once a graduate secures a job within this industry, they will start to pay back their student loan. GOV.UK states that if a graduate started university before 1 September 2012, they will only start repaying their loans when their income is over £17,495 per annum. If they started after this date, these monthly payments will be deducted when their annual salary is over £21,000. The way in which this is calculated means that the more an individual earns above a certain threshold, the more they will have to pay back each month.

For further insight into the distribution of salaries across some front office roles, take a look at the table above. It gives details of the average salaries attached to key positions, and shows the curve of salary maturity as you progress in your career, plus potential bonus percentages.

UK SALARY & BONUS GUIDE
Graduate/
Analyst
Associate / Manager VP/
Associate Director
Director MD
Corporate Banking £35 – £55,000 £55 – £80,000 £70 – £120,000 £120 – £270,000 £170 – £350,000
Potential Bonus 10 – 50% 20 – 70% 30 – 100% 50 – 150% 100 – 200%
Mergers & Acquisitions £45 – £80,000 £80 – £100,000 £120 – £145,000 £150 – £250,000 £200 – £350,000
Potential Bonus 20 – 70% 50 – 100% 80 – 120% 80 – 200% 100 – 200%
Equity Capital Markets £30 – £50,000 £60 – £110,000 £90 – £140,000 £120 – £200,000 £150 – £300,000
Potential Bonus 10 – 30% 30 – 100% 50 – 150% 100 – 200% 150 – 200%
Asset Finance £30 – £50,000 £40 – £75,000 £45 – £85,000 £90 – £140,000 £140 – £300,000
Potential Bonus 10 – 30% 15 – 40% 20 – 100% 35 – 100% 50 – 200%
Credit analysis £35 – £50,000 £50 – £80,000 £75 – £130,000 £90 – £200,000 £150 – £350,000
Potential Bonus 10 – 30% 20 – 50% 20 – 70% 30 – 100% 50 – 200%
Credit Research £40 – £60,000 £65 – £90,000 £85 – £130,000 £110 – £220,000 £180 – £400,000
Potential Bonus 20 – 50% 30 – 100% 50 – 200% 50 – 200% 100 – 200%

 Source: Michael PageThe Outlook for 2016: Front office banking and asset management.

About the Author

  • About Michael Taylor: Michael Taylor is a Content Strategist who writes financial articles on behalf of NatWest.

Michael Taylor

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