A new survey has brought to light that bankers in the Middle East are dissatisfied with their 2013 bonuses and would rather leave their current employer and head elsewhere than face the same situation next year.
According to the 2014 Middle East bonus survey conducted by eFinancialCareers, a global job portal for banking and finance professionals, nearly 60% of the respondents in the region said they are disappointed and would look into other global financial centres, among them in Asia-Pacific, for better opportunities. While 46.3% claimed to have received a bonus uplift for 2013, 21.3% received less and 25% said that their payout remained the same. But just 9.3% said the bonus did exceed their expectations. Instead, 48.7% were disappointed with the bonus and 34.7% said it was "in line" with what they were anticipating.
The main reason for the frustration is that although the Middle East, especially the Gulf countries, had a very good year in investment banking with impressing earnings by the banks, bonuses are still lower than in other financial centres in the world.
In the GCC, average banking employees' bonuses were $22,700, with bankers in Saudi Arabia being the best remunerated at an average of $32,100, followed by Qatar at $21,900, the UAE with $20,000 and Kuwait with $11,300.
However, these figures fade in view of what is being paid in other global banking hubs: In London, the best paying place for bankers, the average 2013 bonus was $89,000, the survey says, in the US $72,000 and in Hong Kong $32,600. Only Singapore had a lower average than the Middle East, with $20,200.
The survey also shows that bankers' 2013 bonuses in Australia rose 18% over the previous year, reaching an average of $41,200. However, Australia remains a market with a small financial industry and limited employment options.
Even considering that bonuses in the GCC are tax free, they are still less attractive as compared to London. The UK's 45% rate of income tax takes some of the luster off the country's high bonuses, but the net figure is still way above the untaxed GCC average.
"Bonuses [in the GCC] have failed to meet expectations, and the level of employees looking for a new job is also worrying," James Bennett, eFinancialCareers' global managing director, said in the report. "If employers can't meet their employees' bonus expectations, they will need to find new ways to strengthen the loyalty of their talent."
That said, if bankers want to move to Asia-Pacific, they would be best off in Hong Kong. Singapore's low bonus is partly a result of the fact that it is a traditional hub for operational functions with many jobs being in the back office. Hong Kong, instead, benefits from a bigger equity market and better access to mainland China. And the highest rate of income tax in Hong Kong is just 17%, making the net payout still more attractive than in Qatar, the UAE and Kuwait.
© Gulf Times 2014
