Dive Brief:

• Retail and commercial bankers at regional banks could see their year-end bonuses drop more than 20%, according to a quarterly projection published Tuesday by compensation consultant Johnson Associates.
• By contrast, retail and commercial bankers at the U.S’s global banks could see their bonuses jump by 10% to 20%, Johnson Associates found, illustrating the prosperity gap between banks by asset size amid the banking crisis that accelerated in March.
• “We have the have and have-nots: Big banks are doing great, small banks are suffering,” Alan Johnson, Johnson Associates’ managing director, told Bloomberg on Tuesday.

Dive Insight:

Indeed, profits across the U.S. banking sector jumped 33% year-over-year in the first quarter — to reach roughly $80 billion, the Financial Times reported Wednesday, citing data provider BankRegData.

“Most of the industry is not failing,” banking consultant Bert Ely told the Financial Times.

Less than 200 of the nation’s nearly 4,400 banks posted losses in the first quarter, BankRegData found, based on quarterly reports lenders make to the Federal Deposit Insurance Corp.

But net income among banks varied in the first quarter from JPMorgan Chase — which earned $11.7 billion during the three-month span from lending, payment processing and other activities — to PacWest, which lost $1.2 billion, BankRegData found.

Regional lenders can maneuver their way to big boosts. First Citizens Bank, which acquired much of Silicon Valley Bank, saw its net income jump more than 30-fold in the first quarter, according to earnings announced Wednesday.

The Raleigh, North Carolina-based bank reported a profit of more than $9.5 billion for the first quarter, compared with $257 million in the previous three-month period.

But banks may be more inclined to pass on their good fortune depending on how the net income figure shakes out. 

Retail and commercial banking isn’t the only segment that may see disparity in bonuses, Johnson Associates predicted.

In investment banking, for example, the bonus gulf may be connected to job function. Bankers in underwriting could see their year-end incentives swell by 5% to 10%, while those advising mergers and acquisitions — where activity has fallen off — could see a 15% to 20% trim in bonuses, the consultant predicted.

Johnson Associates saw bonuses remaining flat for bankers in several other roles, such as firm management and corporate staff, and those serving high-net-worth customers, according to Tuesday’s report. Bankers in equities sales and trading are also expected to see a flat bonus pool, although fixed-income traders could see a 10% to 15% bump in year-end incentives, the consultant found.

Bankers in asset management, meanwhile, are expected to see their bonuses drop 5% to 10%, according to Tuesday’s report.

The quarterly bonus predictions — and first-quarter bank profit data — come roughly a month after New York’s comptroller reported the average Wall Street bonus dropped 26% in 2022.