Report: What will become of UBS's bonuses for last year? [Likely Bad with Significant Market Share Declines]
Source: https://www.efinancialcareers.com/news/ubs-investment-bank
"UBS won’t be publishing its Q4 2024 results or announcing bonuses for a little while yet, but it seems that its investment bankers didn’t have the best year.
Market intelligence provider Dealogic said that UBS' global investment banking (IB) revenue grew by 14% between 2023 and 2024. Unfortunately for UBS, the global IB fee pool grew by 29%. As a result, UBS’ market share fell from 2.6% to 2.3%.
The fall wasn't concentrated in a particular region.
In EMEA, Dealogic's figures said that UBS’ investment banking revenue declined from $644m in 2023 to $600m in 2024. A 7% drop isn’t necessarily the end of the world, but against what Dealogic said was a 35% increase in the region, it’s a bad look. Dealogic said UBS's EMEA market share fell from 3.8% to 2.6%.
In APAC, Dealogic said that UBS’ IB revenue rose by 4%, from $317m in 2023 to $330m in 2024. The regional IB fee pool, however, grew by 33%. UBS' market share therefore went from 7.4% to 5.8%.
Other European banks fared better: Dealogic's figures suggest that Barclays’ wallet share increased from 3.1% to 3.3% globally, for example. In EMEA, Barclays' market share went from 3.8% to 4.0%. And in the Americas, Barclays's share went from 3.3% to 3.7%. Deutsche Bank did similarly well globally.
Figures from other market intelligence firms paint an even starker figure for UBS. LSEG, formerly Refinitiv, said that UBS’ investment banking revenue fell by 5% between 2023 and 2024. LSEG estimated that the global fee pool grew by 14% over the same period. It estimated that UBS' market share fell from 2.1% to 1.8%.
It seems that UBS's Q4 went particularly poorly. In the first three quarters, things went well. UBS said its M&A revenues were up 14% for the first nine months of 2024 vs the same period of 2023; for debt capital markets, the figure was 32%. Equity capital markets revenues were up 33%.
The legendary Credit Suisse Leveraged Finance (LevFin) team also seems to have misfired. Its former head, Marc Warm, was named to lead UBS' LevFin team back in August, with UBS veteran David Slade "promoted" to vice chairman in the process. It might be too little, too late: Dealogic said that UBS’ LevFin market share in Europe fell from 2.8% to 1.9%, and was flat for US LevFin.
UBS's investment banking struggles come despite its big hiring. Financial News reported that UBS added 200 Credit Suisse dealmakers. In 2023 it also hired over a dozen MDs from the Barclays, including Laurence Braham, its global co-head of tech banking, and Richard Casavechia, head of Americas.
At one point, UBS' ambition was to be a top five investment banking player in Europe, and a top six player in America. "On the global banking side, we see value in the combined entity," said former UBS CEO Ralph Hamers immediately after the acquisition of Credit Suisse.
It's not all doom and gloom, however. Market intelligence provider Tricumen said that in the first three quarters of 2024 at least, UBS was more or less average compared to its peer group. It also showed that it was ahead of rivals such as Barclays, BNP Paribas, and Deutsche Bank.
UBS declined to comment."
There's a total of 2 questions that will determine what your bonuses will be: Are you on a guaranteed bonus and are you by any chance in either LevFin or Industrials in the Americas? LevFin lead-lefts saw a volume increase, and the goal for LevFin is to win more leads, not overall volume so they outperformed. Industrials also drastically outperformed particularly in M&A, basically carrying almost half of all UBS M&A volume this year despite industrials not being a big M&A sector for the year. If on a guaranteed bonus, you're bonus is probably good. If you are in either LevFin or Industrials and not on guaranteed bonuses, you may get okay bonuses if you are a senior for meeting the internally outlined goals. Note that I say maybe because bonus pools are at the discretion of bank heads and group heads, very possible those groups get punished for everyone else's failure too. If anyone else, you will 100% get a very terrible bonus because the bank did not meet internal expectations and all the guaranteed bonuses take up a huge part of the comp bucket.
Have banks ever historically not honored guarantees? (Is there an out clause for banks?)
It's contractual, they will get their guaranteed bonuses. Most of the people on guaranteed bonuses from Barclays did not do well or even perform close to expectations. The MDs hired from Barclays will very likely be gone in 2 years as it's shaping up that MV's leadership is nowhere near the standards that the senior leadership in Rob or Sergio wanted. The senior leadership is big on growing in America's both IB and WM, which MV has not been able to deliver despite tens of millions yearly at the very least in senior hires.
Maybe Ros is lurking in the background ready for one last encore
Market share doesn’t really matter, wouldn’t read too much into it
Agree with this point - it is more based off of the fee pool total vs cost basis rather than market share.
Fees generally up + lower cost = will probably be at market bonuses, if not slightly up.
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