HSBC’s DCM bankers upset by unexpected retention bonuses for M&A bankers

As HSBC works on phasing out its equity capital markets (ECM) and mergers and acquisitions (M&A) divisions in various regions, the bank recently executed a significant number of job cuts with more expected to follow. The bank is reported to still be downsizing sector teams, leading to both pleasant surprises and disappointments among employees.

On one hand, bankers actively engaged in live deals were pleasantly surprised to receive substantial retention bonuses. However, on the other hand, debt capital markets (DCM) bankers, who are crucial for HSBC’s future debt financing endeavors, were disappointed with the unexpectedly small bonuses they received. While HSBC has chosen not to comment on the situation, it has been revealed that M&A bankers in London have been granted bonuses that will secure their presence until early 2026. Conversely, DCM bankers felt let down as their bonuses hardly showed any improvement from the previous year, which was already considered subpar.

Despite no DCM professionals losing their roles in the recent wave of cuts, many within this division expressed dissatisfaction with the bonuses they received. This sentiment of dismay was summed up by an insider who mentioned that the bonuses were underwhelming, especially considering the importance of debt financing for the bank’s future operations. Some DCM employees had expected the cuts to also clear out senior staff who have overstayed their welcome. However, this expectation did not materialize as planned, leaving some managers disappointed with the perceived missed opportunity.

HSBC’s latest compensation report highlighted that the average total compensation for material risk-takers at the bank decreased slightly from $1.4 million in 2023 to $1.35 million in 2024. This financial adjustment seems to have affected DCM bankers directly, who were banking on a more substantial reward for their efforts. As bonuses are scheduled to be disbursed in March, it remains to be seen how this will impact attrition within the organization, with some speculating that discontentment over bonuses could lead to some employees seeking opportunities elsewhere.

In conclusion, the disparity in bonuses between M&A and DCM bankers at HSBC has been a source of contention among employees. While some were pleasantly surprised by their bonuses, others were left disheartened by the unexpectedly low rewards, especially at a time when the bank is transitioning its focus to debt financing. The upcoming bonus payout period will shed more light on the aftermath of these disappointments, with employees monitoring the situation closely for any further changes.