European banks are finding it hard to recruit the right people due to new regulations and intense competition from some of their U.S. peers, industry insiders have told CNBC.
“It is a vicious circle, isn’t it?” a senior executive at a European bank told CNBC who preferred to remain anonymous due to the sensitive nature of the topic.
“You want to hire the right talent because you can see the business is suffering, but you don’t get approvals for the headcount and when you finally do, you aren’t able to match the salaries,” they told CNBC.
Pay in the banking sector is generally higher compared to other industries. A junior-level analyst in a trading role at a European bank can start at anything between $50,000 to $60,000 for a base salary. On top of this they would receive allowances and a bonus, which can sometimes be given in the form of company shares.
This is where U.S. banks differ as they tend to stick to cash bonuses, taking the overall compensation of a junior analyst to somewhere between $80,000 to $100,000. This gap starts to widen more as employees go up the ladder.