Commercial Banking vs Investment Banking Analyst Pay
Has the pay for analysts in commercial banking increased a lot in recent years? I've seen a post for a Citi commercial banking undergrad internship in NYC that pays 100k per year, and one for Capital One in the DC area that pays 97k per year. I'm very surprised that these base pay numbers are almost equal to IB. I understand that the bonus for CB roles are lower than for IB, but compared to what people said on posts from past years, it seems like the gap salary between the roles has decreased by a lot. Has the pay for CB really gone up so much lately, and if so, does anyone know why?
Based on the most helpful WSO content, the pay for commercial banking (CB) analysts has indeed seen significant increases in recent years, with some roles now offering base salaries close to those in investment banking (IB). For example, Citi's commercial banking internship in NYC at $100k and Capital One's DC role at $97k are competitive figures. However, it's important to note that while base salaries in CB have risen, the bonus structure in IB still creates a substantial total compensation gap between the two fields.
In IB, first-year analyst total compensation (base + bonus) averages $129,200 as of 2018, with bulge bracket banks offering $126,800 to $142,800 annually for first-year analysts. CB roles, on the other hand, typically have lower bonus percentages, which keeps their total compensation below IB levels despite the narrowing base salary gap.
The reasons for the increase in CB pay could include:
While CB pay has improved, IB still offers higher total compensation, especially as analysts progress in their careers.
Sources: 2018 Investment Banking Report: 8 Trends in the Industry, https://www.wallstreetoasis.com/forum/investment-banking/2017-investment-banking-report-8-key-trends-to-know?customgpt=1, 2017 Investment Banking Report: 8 Key Trends to Know, Q&A:Commercial Banking SVP Ask Me Anything
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