Despite the big slump in the banking industry, Citigroup is boosting pay for most junior bankers—increasing salaries by as much as 15%.
- Citigroup Inc. is bumping up pay for junior bankers by as much as 15%.
- According to people close to the company, the banking firm is increasing base salaries by an average of 10% to 15% for associates and vice presidents.
- The pay bump is a shock as the bank faced a tough year, along with other banking institutions, facing a 53% drop in investment-banking fees for 2022.
Why it’s news
Citigroup Inc. has raised salaries for junior bankers despite the downturn in the banking industry.
As of late, banking revenue has hit one of the worst declines in history, dropping lower than the financial crisis of 2008, leading many banks to cut costs and employees.
Goldman Sachs, one of Wall Street’s biggest banks, recently laid off around 3,200 employees, and many other banks are looking to do the same.
Banks have also been forced to cut back on bonuses amid the downturn, cutting bonus pools to employees by 30% to 40%—leaving many employees disappointed, considering bonuses amount to a large portion of their annual pay.
Despite the turmoil within the banking sector, Citigroup is upping pay. In an effort to retain young talent that is the future of the firm, the bank has bumped up pay for junior bankers by as much as 15% and is increasing base salaries by an average of 10% to 15% for associates and vice presidents
Citigroup recently warned investors that the downturn in banking would send compensation expenses up this year and that the investment banking portion of the company took a hit from this year’s slump.
“While the pipeline looks more promising and client sentiment is improving, it would be hard to precisely predict when the tide will turn in 2023,” says Citigroup Chief Executive Officer Jane Fraser.