Page last updated at 23:58 GMT, Thursday, 4 February 2010

Banker insists he deserves his bonus

Man in silhouette

Investment bankers have been much maligned in recent months, with their salaries and bonuses evoking much anger and despair among the general public. Here one young investment banker describes what they do, how much they earn and why they are worth it.

When first setting out, I was not sure what I wanted to do in life. I knew that whatever I eventually decided to do, investment banking would be a good door opener. I knew that whatever I applied to do later, future employers would look look favourably on it.

Apart from that it's fast-paced, which I like, and it's very results orientated.

The money was also a factor - if it was less I'm not sure I'd have applied.

And it's intellectually stimulating.

Average day

I usually come in at 9-9.30am. In terms of the daily tasks, there is a lot of [financial] modelling. A very common modelling task I do is; how would this company perform if you put this much debt on it.

Another common one is valuation analysis, so you basically model what you think the performance of the company will be over the next 10 years and then come up with a value that you should assign to that performance.

The expectation is that you will work past 9pm, a minimum 12 hour day. You can safely say that you will be working at the weekend, most weekends.

The average for a week is a 100 hours, something like that. My manager expects me to put in these hours.

Bonus hopes

My base salary is £50,000 per year and my bonus.

The usual expectation is that your bonus is somewhere around 90%to 110% of your base salary.

The number I've targeted for this year is a £40,000 bonus, but it's hard to say because the past couple of years have been so difficult because of the credit crunch and bonuses haven't been typical at all.

If I get below £30,000 I will be very, very disappointed and quite shocked. Though how shocked will depend on whether other people at my level get that.

If they were to tell me it was £30,000, I'd definitely say that was way below my expectations.

I've been working very hard and put in extremely long hours. I am rarely home before 11pm.

My bank has done quite well this year and we're constantly told we're doing very well, so I don't see how they could justify paying us just £30,000, given the performance of the bank and given that other banks are likely to pay people at my level more than that.

My base salary at £50,000 is already below what is expected for my level at other banks. I think most others pay £55,000 and I think a £30,000 bonus is likely to be below what other banks are paying as well.

Lot of money

I have a lot of friends who aren't in banking and who earn a lot less than me. And if I think about it, at my age, it's a lot of money.

Also, for the money I'm earning, I don't think I'm giving back to society at that level. So from that respect, I think it's a lot of money.

If all investment banks paid at a lower level, I wouldn't really be bothered by it. It's just the fact that I know the other banks pay more and I just feel that my bank would be taking advantage of me if they were paying me less.

It also comes back to the hours. If I look at my friends, yes, they earn a lot less than me, but they have a much nicer lifestyle.

They are able to go out with their friends after work, and take two to three weeks holidays. In investment banking, for an analyst, its almost unheard of to take two weeks holiday.

I can completely understand why the general public are angry that RBS should be paying bonuses.

But I know that if they don't pay the bonuses, people will leave RBS and that's the end of the bank.

The reality is that people work in banking mainly for the money.


The BBC has agreed to conceal the identity of the investment banker and that of his employer.

broadcast the interview on 4 February 2010.



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