The majority of junior bankers at Citigroup will get pay hikes of up to 15 percent, at a time when the Wall Street giants are increasingly cutting jobs and trimming bonuses.
Sources said the investment bank is also boosting basic wages for associates and vice presidents by 10 percent to 15 percent on average.
What this shows is the growing challenge for financial firms to retain employees.
The pay increases come after Citigroup warned investors inflation would drive up salary costs this year.
The Wall Street giant and its peers are also competing for talent with private equity firms, with dealmaking likely to recover after a rough year.
Last year, financial companies were hit by a drastic fall in dealmaking as markets sank due to increased geopolitical turmoil and recession fears.
Citigroup reported a 53 percent decline in investment-banking fees for 2022, but its traders were able to raise revenue by 7 percent by leveraging unstable markets.
Citigroup CEO Jane Fraser alerted analysts last week that the firm’s investment banking unit “felt the pain” of the industrywide slowdown in deals.
She said: “While the pipeline looks more promising and client sentiment is improving, it would be hard to precisely predict when the tide will turn in 2023.”
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Other bankers have warned staff of pay cuts in 2023.
For example, Credit Suisse Group AG Chairman Axel Lehmann cautioned staff to expect compensation cuts after a “horrifying year.”
However, JPMorgan Chase’s co-head of investment banking has said that bonuses will “absolutely” be trimmed.
Recently Goldman Sachs announced that it is slashing jobs en masse, hitting nearly 3,200 people.
A spokeswoman for Citigroup declined to respond when reached for comment.