BNP Paribas has long been the best paying French investment bank, but because French investment banks aren't big payers, that hasn't been all that much of a big deal. Now, things could be changing.
Last year, BNP hiked the average bonus for the 766 material risk-takers in its corporate and investment bank to €443k according to its most recent compensation report. This was nearly 25% more than BNP's average material risk-taker received as a bonus in 2020.
Material risk-takers include top bankers and top traders. Most are managing directors. All are BNP's top paid staff. When salaries are added in, the average material risk-taker at BNP's corporate and investment bank earned slightly over €1m last year, up from €859k the year before.
BNP says the pay figures aren't entire comparable because it defined its material risk-takers a bit differently last year, but the French bank definitely has more high earners than before. 292 people there earned over €1m in 2021, compared to 222 people in 2020, and there were significantly more high earners in the €2m-€2.5m bracket.
BNP's increased generosity comes after it incorporated Deutsche Bank's prime broking and electronic equities business and brought the Exane brokerage business fully in-house.
If 2021 was a good year for pay among the highest earners at BNP Paribas, 2022 could be better still. The French bank said today that revenues in its equities sales and trading division rose by 61% year-on-year in the first quarter of 2022 and that it's expanding the business in the Americas and Asia Pacific regions. In fixed income sales and trading, where rising macro trading revenues across the market play to BNP's strength, revenues were up nearly 50% in the same period.
BNP Paribas doesn't break out compensation spending, but the fact that operating expenses across the board in its global markets division were up 30% year-on-year in the first quarter as revenues rose, surely bodes well for traders' pay.
Away from the highest earners in the front office, things might not be quite so promising at the French bank though. BNP also said today that it's heavily focused on streamlining costs and is moving staff to shared services centers in low-cost locations. In the process, it's investing heavily in artificial intelligence and automation and is cutting office space (spending on premises in Europe is expected to fall by 66% by 2025). It's also spending heavily on cybersecurity, and has nearly doubled the cyber budget in four years while expanding headcount in the area to nearly 2,700 full time employees.
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