Base pay rises of 15% for Hong Kong bankers

Average basic pay for investment banking and fund management staff in Hong Kong has risen by 15% to approximately HK$890,000 in 2011, up from approximately HK$775,000 12 months ago according to  recent research amongst over 630 investment banking and hedge fund staff in Hong Kong  by Astbury Marsden*, a leading financial services recruitment firm.

Pay rises for staff in Hong Kong have outpaced those for City staff in London, which averaged 12% over the same period. 

Mark O’Reilly, Managing Director of Astbury Marsden Asia Pacific, says: “Investment banking teams operating in Hong Kong have performed more strongly than their counterparts in London and New York in 2011. Generally banks are keener to invest in their teams in Asia than in Europe and the US and that has meant a bigger boost for Hong Kong bankers’ base pay.”

The research showed that the biggest pay rises went to staff at “Managing Director” level have also seen their pay outperform the average with a 25% pay increase if they switched employer in 2011 to approximately HK$ 2,500,000 per year. Astbury Marsden explains that more senior staff tend to see their pay outpace the growth of more junior staff.

Staff at “analyst” level could expect an average 20% pay rise if they switched employers during 2011 to HK$400,000 per year. 

Astbury Marsden explains the downturn in 2008-09 forced several banks and hedge funds to curtail their graduate or MBA intake. This means that there is now a shortage of trained and capable junior to mid-level staff.

Explains Mark O’Reilly: “Banks that pared back their graduate intake early on in the credit crunch struggled through the start of 2011 with a lack of staff at Analyst and AVP level. As a result, banks have had to increase pay to try and poach analyst level staff with two or three years’ experience.”

Astbury Marsden adds that pay rises for staff at analyst level have also been introduced as part of an overall initiative by investment banks and hedge funds to reduce bonus payments as a percentage of total compensation packages.

Staff working in compliance teams reported the biggest pay rises, enjoying an average 21% boost to their salary. This was more generous than the average 11% pay rises enjoyed by their counterparts in London over the same period. 

Says Mark O’Reilly: “Compliance staff have done exceptionally well this year. Over the last couple of years banks in Hong Kong have expanded their product lines, which has created a surge in demand for compliance staff to ensure these new products are properly monitored. Regulatory oversight in Hong Kong has also become more stringent.”

However, Astbury Marsden notes that changes in Hong Kong banking market towards the end of the year may mean 2011’s strong growth in pay is not repeated next year.

Mark O’Reilly adds: “Most of these pay rises will have been agreed earlier this year, when confidence in the banking recovery was strongest, and banks were eager to retain and recruit staff in order to be best-positioned for the expected growth. More recently pay increases have been rarer and more modest.”

Astbury Marsden adds that pay rises have been the most lucrative for those banking staff who switched employers, who received an average increase of 25%, compared to 20% for staff winning a promotion with their current employer.

Those staff who stayed with their current employer and did not receive a promotion or changed jobs received an average pay rise of 9.5%.

*Research conducted among over 630 investment banking and hedge fund staff in Hong Kong, from Analyst level to Managing Director.