With London being one of the world’s leading financial hubs, many investment bankers flock to the city in hopes of securing a high-paying job at a prestigious bank. The salary range for investment bankers in London can vary greatly depending on factors like experience level, bank reputation, and economic conditions. However, some general patterns emerge when examining compensation data. At the junior level, analysts straight out of university can expect base salaries around £50k-£60k, with bonuses taking total comp to £100k or more. At mid-level, associates earn £150k-£250k all-in, while vice presidents and directors make £250k-£500k or more. At the highest levels, managing directors and partners can make millions in salary and bonus. However, investment banking is known for very long hours, high stress, and high turnover. Understanding the salary range and lifestyle is key when considering this career path.
Junior investment bankers earn £100k total comp, weighted towards bonus
Based on publicly available data, junior-level investment banking roles like analyst or associate have base salaries around £50,000-£80,000 in London, depending on bank prestige. However, performance bonuses take total compensation to over £100,000 for top performers. For example, a first year Goldman Sachs analyst may earn £70,000 base but receive a £65,000 bonus. Bonuses are highly variable and tied to individual and firm performance. At junior levels, bonuses make up the majority of total compensation.
Mid-career investment bankers earn £150k-£500k, with salary rising and bonus falling
As investment bankers rise through the ranks to vice president, director and managing director levels, base salary tends to increase to £150k-£250k while bonuses shrink as a percentage of total comp. This reflects greater job security and responsibility. More experienced bankers also take a larger share of fees generated from deals. Total compensation ranges from £250k up to £2 million+ for rainmakers landing huge deals and managing client relationships. Salaries over £500k are common for directors and managing directors at top bulge bracket banks.
Elite banks and groups pay the highest London investment banking salaries
There is a distinct hierarchy when it comes to investment banking salaries in London. Groups like Goldman Sachs, JPMorgan, Morgan Stanley and Rothschild are known for paying top of market salaries to attract top talent. Boutique banks focused on M&A, equities or fixed income also pay handsomely. However, lower prestige banks like Barclays pay below market rates. The highest earners are often in lucrative groups like M&A, trading or equity capital markets.
Bonus portion of salary depends heavily on bank and market conditions
The split between base salary and bonus for London investment bankers depends on bank culture and financial performance. In boom years, bonuses can massively exceed base salaries, while in post-crisis years like 2008 bonuses shrink dramatically. For example, a 2010 study showed RBS investment bankers earned £190k base but only £11k bonus. Banks like Goldman are known for rewarding employees heavily when the bank performs well.
Top earners make millions, but banking has high turnover
While fresh graduates can expect to earn over £100k out of university, the potential earnings grow exponentially for bankers who stick around and work their way up the ranks. Rainmaker managing directors and partners at elite banks routinely make millions in total compensation when bonus season arrives. However, burnout and attrition are very high in this high stress field characterized by 100+ hour work weeks.
To summarize, investment banking salaries in London range from around £100k total for junior analysts up to millions for top rainmakers and partners. However, banking comes with grueling hours, stressful work and high turnover. The top earners land huge deals and manage key client relationships. Understanding the pay scale and lifestyle tradeoffs is important when considering a career in investment banking.