JPM 4 figure bonuses, 40% return rates…. Are IB analysis in for a rough next few years? Wonder what analysts were thinking as the 2008 recession was looming….
| +405 | Evercore Intern Seizure | 62 | 6h |
| +113 | UBS IB Americas has failed, now behind Santander and Stiffel | 31 | 44m |
| +79 | JPM M&A is Gone??? Purely Coverage Banking??? | 44 | 2m |
| +60 | How do I understand vs. just memorizing? | 11 | 10h |
| +48 | Losing my personality in Banking | 9 | 2d |
| +45 | The good and bad with Wells Fargo | 14 | 1h |
| +42 | Associate & Above IB exits | 18 | 11h |
| +41 | Sent my Claude prompt to 200+ Teams chat. MD wants to see me Monday. | 23 | 1h |
| +33 | Incoming IB Analyst: Best Ways to Prepare? | 13 | 8h |
| +33 | Some banks are overrated as fuck | 10 | 5h |
Career Resources
Get instant access to lessons taught by experienced private equity pros and bulge bracket investment bankers including financial statement modeling, DCF, M&A, LBO, Comps and Excel Modeling.
My view. We are in the top of the first inning of the bloodbath and three years from the trough.
- IB headcount will be down 40-50% in the next three years through attrition and layoffs. Maybe more. The analyst bonuses at several firms are a kind way of telling people to GTFO
- Banks will protect their stars at every level. Just “above average” players will see their comp fall. Average and below are unlikely to survive and if they do, there is no reason to pay them well
- Analysts will have smaller classes; associates and VPs and Ds and average MDs are where the real pain will happen
- Amongst the large firms, American banks will continue to consolidate market share plus possibly Barclays and DB. But this will be on a much smaller market and there will be a lot of pain
- Middle market firms will continue to perform well although at many shops (JEF, HL), there is over staffing and I can see these firms being brutal in order to pay their producers
- Independent firms will diverge in their fortunes, some illustrious names will be decimated, some will muddle through. Overall, it will be tough. I would still prefer to be at these or the MM firms in a downturn because they tend to be less political and advisory work is less cyclical
- Those that survive will do very well in the next cycle; it’s often a blessing to start in a downturn if you can make it through
- Whatever hits banking will hit law and consulting equally hard, and tech much much harder. Amongst high paying professions there will be little room to run
in summary, I see a bad moon rising
Interesting take - why do you think it’ll be a blood bath?
+tons of pe money
+not a ton of leverage (lenders weren’t running wild)
+margin pressure in general Will drive consolidation
Soruce: Trust me bro
I’m a banker - it’s my job to be precise when dealing with uncertainty (what we do when we recommend a specific purchase price to a client or price a bond).
2008 is the wrong comparison. Banking fees actually didn’t drop and capital markets were close for no longer than a month. Rescue financings and balance sheet repair made 2009 a good year, and you saw banks like Barclays and Jefferies bid aggressively for bankers. I don’t think headcount fell.
2001 to 2004 and 1990 to 1993 feel much more comparable in terms of how long markets are shut. The three years is a guess based on the comps. It generally takes a year of shellshock (which is now), a year of bloodletting and a year of recovery. In each of those markets, banking headcount fell 40-50% and the overhiring was greater this time.
and why I feel this persists.
Equity and HY capital markets have been shut for the better part of six months. This didn’t happen in 2008 and is worse than 2001.
Bulge bracket banking revenues are down 50%+. Comparable to 2001. M&A will do ok but it can’t conpensate for loss of ECM and HY.
Large balance sheet losses for hung LBOs. Goldman losing money is a canary in a coal mine.
and an increasing acknowledgment relative to the past that at most banks 20% of the people bring in 80% of the money which means a lot more understanding that you need to pay your stars and everyone else is expendable
So much fear mongering going on. Sure bonuses and M&A volume won’t be at peak Covid level but this isn’t going to be an ‘08. I think we as a generation just aren’t used to recessions when they’re a pretty normal aspect of the economical cycle.
how tf you certified as a car brand?
Cant comment on current state of affairs in banks since I am no longer a banker but I started my analyst program in 2008 at a bulge bracket so can give some color on what happened in 2008 and don't think this is comparable in terms of magnitude
I was a summer in 2007 which was a record year for analyst bonus (top tier first year analyst at $70K with $60K base, thank god for inflation) but even towards end of my summer the doom was coming and most bankers were already cautious and telling incoming analyst they were unlikely to get anything like that.
Anyways when I started in summer 2008 you started living the recession with very limited live deal flow and obviously all the news including Lehman's BK. There was a first round of layoffs in September '08 and it was mostly bad performers at Associate and VP level. There was a second round in December '08 and this one impacted 3rd year analyst, associates, and VPs and it included top performers and probably 10 to 15% of most groups. This second round included 1st year analyst in DCM and ECM but not IBD.
There was a third round in March '09 of mostly 1st year analyst and associates.
But by October '09 most groups were looking to hire. My group let go 4 analyst, 2 associates and end up hiring 2 analyst in October '09. Also there was a decent salary bump in summer '09 ($60k to $70K)
The housing market is ROCK SOLID
People who keep saying consumer balance sheets are strong haven’t spoken to anyone outside of IB recently
My associate just sent me an email asking me to change 1 word in a word doc that they had open. Things are going to get much worse
Yall are some Negative Nancys. Is this the type of shit you tell your clients? No wonder no one's getting any deals done. If anyone asks, we're all still bullish. Term sheets due Monday....