Hefty bonuses lure banking professionals to Singapore’s local banks

Bonuses in big banks used to be 40%--how have the times changed?

If you think higher pay from foreign banks is going to dampen hiring in Singapore’s local banks, think again. According to Lim Chaileng, director of banking, finance, and accounting at Randstad Singapore, hiring continues to remain relatively fluid in the city-state’s local banks, which saw a 70% spike in job applications.

But what attracts banking professionals into local banks when foreign banks reportedly give out fatter paychecks? Lim says it all boils down to bonuses, which are considerably higher compared to what is offered by global banks.

Kyle Blockley, managing partner of recruitment firm KS Consulting, affirms this, but says it was only recently local banks’ bonuses became competitive. “Historically bonuses at foreign banks were far higher,” Blockley says. Foreign banks usually counter these bonuses with more competitive benefits and career exposure, and to combat this, local banks offer internal pay increments which can up to 15%, subject to promotions and performance, says Randstad’s Lim.

End-all be-all?

Former Merrill Lynch private banker Rahul Sen explains that the bonuses are used as retention tools against huge banks such as UBS and Credit Suisse. Sen, who is now head of wealth management at search firm The Omerta Group in Singapore, adds that US banks like Citi, Goldman Sachs, Merrill lynch, and J.P. Morgan paid bonuses as high as 40%, but the financial crisis compelled them to change to a discretionary pay-out model.

Meanwhile, KS Consulting’s Blockley doesn’t think larger bonuses are the end-all-be-all for being competitive in hiring banking professionals. Blockley says job losses at banking behemoths such as Barclays and Standard Chartered have fueled the perception that Singapore’s local banks are in fact, more stable employers.