Citigroup Increases Salaries for Junior Bankers Despite Difficult Year

Citigroup Inc. is increasing the pay of its junior investment bankers by up to 15%, despite the fact that many other Wall Street firms are reducing their workforce and reducing bonuses due to the decrease in deals in the past year.

A New York-based bank is taking steps to keep its staff, as evidenced by a 10-15% increase in base salaries for associates and vice presidents, according to sources familiar with the matter who requested anonymity when discussing internal information.

Citigroup recently announced a pay increase for its employees after warning investors that inflation would cause compensation expenses to rise in 2021. Additionally, the Wall Street giant and its competitors are facing competition from private equity firms who are attempting to recruit talent, as dealmaking is anticipated to increase after a difficult year.

A representative from Citigroup chose not to provide a statement.

Bank of America has taken a conservative approach to staffing, freezing most hiring in order to reduce costs and prepare for a potential economic downturn. This decision is part of the bank's strategy to ensure financial stability in the face of uncertain economic conditions.

Credit Suisse has announced that it will be providing upfront cash bonuses to its senior staff members. This move is intended to reward the hard work and dedication of the company's most experienced employees.

According to Solomon, Goldman Sachs moved too hastily into the consumer banking sector.

Last year, financial firms experienced a significant decrease in transactions due to the market's reaction to rising geopolitical issues and worries of a recession. Citigroup saw a 53% decrease in investment-banking fees for 2022, yet their traders were able to capitalize on the unstable markets and increase revenue by 7%.

Last week, Jane Fraser, the CEO of Citigroup, cautioned analysts that the company's investment banking division had experienced the negative effects of the overall decrease in deals in the industry.

Fraser commented that although the outlook appears to be more positive and customers are feeling more optimistic, it is difficult to accurately forecast when the situation will improve in 2023.

Senior bankers have largely been affected by the downturn in business last year. Axel Lehmann, Chairman of Credit Suisse Group AG, cautioned employees to prepare for a reduction in bonuses due to the "horrifying year". JPMorgan Chase & Co.'s co-head of investment banking also confirmed that bonuses will be lower. Goldman Sachs Group Inc. is also reducing its workforce by 3,200.