SINGAPORE: In 2023, Singapore bankers received lower salaries and bonuses than their Hong Kong peers.

The Straits Times reported that according to eFinancialCareers, a platform for financial services careers, the average bonus for a vice president in a Hong Kong bank soared by a staggering 60% to US$72,131 (approx. S$98,095), up from US$45,058 (approx. S$61,277) in 2022.

Meanwhile, in Singapore, those in similar positions had a harsh 40% slash, seeing their bonuses plummet to US$43,539 (approx. S$59,211) from US$71,721 (approx. S$97,537) in the previous year.

Base salaries also played a part. Vice-presidents in Hong Kong pocketed an average of US$163,934 (approx. S$222,943), while their counterparts in Singapore made slightly less, with an average of US$152,446 (approx. S$207,320).

The disparity wasn’t limited to the upper ranks either. Junior bankers in Singapore experienced a 2.2% drop in average bonuses, while their more seasoned colleagues, the directors, faced a hefty 36% cut, the harshest in the Asia-Pacific region.

In Hong Kong, junior bankers’ bonuses increased by 19%, while vice presidents saw a 60% increase. Directors got a 46% raise, and managing directors received a 29% boost.

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According to the report, “All tiers of the Hong Kong finance hierarchy enjoyed higher bonuses than the previous year… Singapore bankers had a very different experience.”

But why is there such a gap in pay between Hong Kong and Singapore?

The Covid-19 pandemic played a significant role. With its strict zero-Covid stance and prolonged border closures, Hong Kong faced capital and talent outflows, compounded by a slower-than-expected recovery in mainland China.

On the other hand, Singapore opted for a different approach, opting to coexist with the virus.

Serena Fernando, a senior consultant at Robert Walters in Singapore, shed some light on the situation. She highlighted the longer working hours in Hong Kong as contributing to the higher compensation.

On average, professionals in Hong Kong work four hours more per week than their counterparts in Singapore.

Additionally, Hong Kong maintains its status as the go-to destination for many banking institutions, even as Singapore solidifies its position as the prime hub for Southeast Asia.

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Inflation is expected to remain high, prompting larger nominal pay hikes in Hong Kong to counter rising costs. This could further widen the compensation gap between the two cities.

Globally, the financial services sector witnessed modest growth in bonuses. Bankers involved in mergers and acquisitions (M&As) saw their bonuses decline by an average of 4%, reflecting subdued deal activity in 2023.

Conversely, professionals trading commodities enjoyed a 6% bonus bump, while those in equities faced a 1% reduction.

High compensation doesn’t equal satisfaction

However, it’s not all about the money. The eFinancialCareers survey revealed that high compensation didn’t necessarily translate to job satisfaction.

Investment bankers, notorious for their gruelling hours, reported some of the longest workweeks in the industry, with M&A specialists clocking in an average of 67 hours per week.

The operations professionals, credit salespeople, traders, and technologists found the most contentment in their pay.

On the flip side, risk (19%) and compliance (13%) professionals were the least satisfied with their pay.

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Globally, while the “sell-side” of the financial market, including banks and brokerage firms, saw a modest increase in bonuses (3.7%), the “buy-side” firms, such as private equity, traditional asset managers, and hedge funds, experienced more significant growth (7.2%).

Hong Kong saw increased compensations while banks were slashing jobs, as the data from a global study conducted by eFinancialCareers gathered insights from 6,000 individuals between February and March 2024.

The survey focused on pay and satisfaction in top financial centres and banks. /TISG

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