Bankers are making it rain — with a catch
Add Axios as your preferred source to
see more of our stories on Google.
Illustration: Aïda Amer/Axios
Traders and bankers are set to see big bonus increases this year, significantly outpacing other sectors in finance, per a new report out Wednesday morning.
Why it matters: A booming stock market, the AI investment surge and a pickup in deal-making are turning 2026 into "the year of the bank," finds the analysis from compensation consulting firm Johnson Associates.
- You can chalk it up to the resilience of the U.S. economy, the firm's president Alan Johnson tells Axios.
Zoom in: Bankers working in equity sales and trading are projected to see bonuses rise between 20-30% or more, the biggest increases in the finance industry, according to the projections.
- Advisory bankers, including M&A dealmakers, could see increases of 15%-20%.
- Overall bonuses in investment and commercial banking are projected to rise 10-15%+.
Friction point: There's a catch. Typically with business booming, you'd see a surge in hiring. AI is changing things.
- "Usually people hire when things are really good, and they're not really doing that," Johnson says. AI and technology are a big part of it, he says.
- It hasn't led to layoffs, thanks to the surge in business this year. But, firms "don't need to hire."
How it works: The projections are based on first-half financials at 20 traditional asset management firms and 15 major investment and commercial banks, as well as the firm's conversations with clients in the industry.
Zoom out: Even with a war and rising bond yields, deal-making and trading raged on in the first half of the year.
- "There hasn't been an event to slow things down," Johnson says.
- The roller-coaster of volatility in the market — witness the recent rise and fall and rise in chip stocks — is also driving more trading.
By the numbers: Investment banking fees overall rose 46%, to $12.9 billion in the second quarter, compared with the quarter a year ago, according to a separate analysis of fees at the five big U.S. banks published by S&P Global Market Intelligence Tuesday.
- Equity underwriting fees rose an astonishing 87% from last year at Goldman Sachs, JPMorgan Chase, Morgan Stanley, Bank of America and Citigroup.
The other side: Those working in the private markets are lagging behind: Bonuses are projected to be flat for those in real estate and at small private equity firms and venture capital outlets.
- At private credit companies — having a notoriously rough year — bonus growth is projected to be flat to negative 10%.
- Private markets have led the pack for more than a decade. The reversal this year is a "seismic change," Johnson says.
The bottom line: Bonuses are up, but the vibes might be less bubbly as AI roils finance.
