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Struggling UK bank hikes salaries for preferred people after cutting jobs

Things are tough at Peel Hunt, the UK mid-market investment bank that's been cutting staff. In today's 2024 results presentation, it revealed that its loss increased from £1.3m in 2023 to £3.2m for the past year. It also said, possibly ominously, that it has a, "strong desire to keep business as intact as possible for [the] remainder of [the] downturn."

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Peel Hunt cut 10 people in London in April, including Jock Maxwell McDonald, its head of equity markets syndicate. Headcount is down 6% on last year. Rival firms like Cenkos Securities and FinnCap, Liberum and Panmure Gordon, Zeus and WH Ireland and Deutsche and Numis have been merging. Chief executive Steve Fine told the Financial Times in April that the market was "hollowed out" with no sign of recovery imminent.

Today's results presentation sounds a little more upbeat. Peel Hunt says, "UK markets have returned to life in the last few months," and that "the UK IPO market as “selectively open”, but is close to being "more widely open."

In the circumstances, Peel Hunt says it's now making "targeted investment[s] in talent given market dislocation." At the same time, it appears to have taken action to retain people who might leave for rivals like Berenberg, which has been picking off staff. - Today's release says there have been "targeted salary increases." This might explain why staff costs have risen.

Further job cuts remain possible. Peel Hunt also says today that it's engaged in, "ongoing work to rationalise staff costs and numbers." It's also investing in AI to "interrogate and monetise" its research.

Sources at Peel Hunt have been complaining to us about their poor bonuses. In previous times, bonus clawbacks for staff who left were a key retention tool. This is no longer as effective as it was. "If the last bonus was zero and the one before that was a pittance, the clawback isn't exactly massive," one employee told us in April.  

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Photo by Philip Veater on Unsplash

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AUTHORSarah Butcher Global Editor
  • Jo
    John Davison
    13 June 2024

    "Regarding bonus payments, everyone knows this is not unique to Peel Hunt. Some bankers complain about their bonuses even in good years, so it's no surprise they do so in bad years. The past few years have been tough for all UK-focused banks, their clients, and the economy in general. Fortunately, it seems things are slowly picking up again. Well done to Peel Hunt on their work on the Raspberry Pi IPO!"

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