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This year will be another bummer on Wall Street, with bankers facing bonuses that could shrink as much as 25% as dealmaking dries up amid surging interest rates, according to a new survey.

Investment bankers will get hit hardest, with year-end bonuses dropping between 15% and 25%, according to Johnson Associates, the compensation consulting firm behind the report.

Workers in retail and commercial banking, meanwhile, could see spikes as high as 10%.

Most Wall Street professionals will have to wait another year for a rebound in year-end bonuses, said Alan Johnson, managing director of the firm. For most it will be another disappointing year. 

While Investment banking advisory continues to be in the doldrums, investment banking underwriters, who have been raising debt financing, can expect a small pay bump of 5% to 10%, the study said.

Meanwhile, retail deposits have surged at major commercial banks and those higher margins will boost pay. But for regional bankers doing similar work at smaller institutions pay will decline 10% to 20% amid massive outflows of cash, according to the study.

Hedge fund bonuses will be tied to the funds performance and could either dip 5% or increase 5% depending on the funds year. Equities trading bonuses will fall between 5% and 10% while fixed income trading bonuses will be relatively flat, the survey found.

Wealth management which has attracted new clients this year could see a 5% increase in bonuses. Asset management which saw profits fall this year will see a marginal decline in bonuses of between 5% and 10%.

Even as ballooning interest rates have stalled mergers and acquisitions and IPOs, higher interest rates mean more deposits and greater margins on those deposits for banks which boosts retail banking revenue.

While the traditional masters of the universe may see a decline in their year-end compensation, less glamorous sectors like retail banking may be raking it in, the report adds. 

Incentive payments throughout the industry will be mostly lower to flat with three notable exceptions — large commercial and retail bankers, investment banking equity underwriters and wealth management pros, who can expect a bump this year, Johnson adds.

Over the last few years, those on Wall Street have been whipsawed when it comes to bonuses — which typically make up a majority of a financier’s salary.

Just two years ago, firms were handing out record bonuses as financial giants like Goldman Sachs and JPMorgan grappled with a dire lack of bankers amid a massive labor shortage.

In 2021, the historic tide of mergers, IPOs, spinoffs and other big strategic deals pushed banker bonuses 30 to 35% higher than their bonuses from 2020.

Equity sales and trading and investment banking advisors also got a healthy bonus bump of 20 to 25 that year. Asset management professionals, including those managing hedge funds and private equity funds, saw a 15% bump.

But the good times came to an end last year with some bonuses falling by as much as 45% as financiers fretted about the possibility of a looming recession. Unfortunately for those on Wall Street, that downward trend is expected to continue.

The declining payouts come as many banks — including Goldman Sachs and Citigroup — cull employees to cut costs.

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Politics

Indian town adopts Avalanche blockchain for tamper-proof land records

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Indian town adopts Avalanche blockchain for tamper-proof land records

A district administration in India digitized more than 700,000 land records, securing them on Avalanche blockchain to ensure transparency and prevent tampering.

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Entertainment

Glastonbury 2025 line-up revealed

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Glastonbury 2025 line-up revealed

The 1975 and Olivia Rodrigo will be among the stars headlining Glastonbury Festival this year, it has been announced.

Glastonbury organisers have revealed the line-up for this summer’s event, taking place between 25 June and 29 June, after months of speculation.

The 1975 will take to the iconic Pyramid Stage on the Friday to headline, then Canadian singer-songwriter Neil Young will perform on Saturday and Olivia Rodrigo on the Sunday.

Other big names performing include British pop sensation Charli XCX, rapper Loyle Carner electronic group The Prodigy.

The announcement comes after Sir Rod Stewart was booked for the Sunday teatime legend slot and Young was confirmed as a headliner earlier this year.

Young’s announcement in January came amid some confusion, as he had days before told fans he was pulling out of the festival because the BBC’s involvement was a “corporate turn-off”.

The Canadian singer-songwriter later said this decision was down to “an error in the information I received”.

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The 1975 will be headlining for the first time, having made their Glastonbury debut in 2014.

The Cheshire band, known for hits such as Somebody Else and Chocolate, have regularly made headlines due to the antics of frontman Matty Healy.

Glastonbury, which takes place at Worthy Farm in Somerset in the summer, has worked closely with the BBC – its exclusive broadcast partner – since 1997.

Neil Young performing at the New Orleans Jazz & Heritage Festival last May. Pic: Amy Harris/Invision/AP
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Neil Young performing at the New Orleans Jazz & Heritage Festival last May. Pic: Amy Harris/Invision/AP

Appetite for the esteemed festival saw standard tickets sell out in 35 minutes in November.

They cost £373.50 plus a £5 booking fee, up £18.50 from the price from the 2024 festival, and were sold exclusively through the See Tickets website.

The date for the resale – where tickets not fully paid for are put back up for purchase – is set for some time in spring.

The headliners last summer on the iconic Pyramid Stage were Dua Lipa, SZA and Coldplay, who made history as the first act to headline the festival five times.

2026 is likely to be a year off for Glastonbury, with the festival traditionally taking place four out of every five years, and the fifth year reserved for rehabilitation of the land.

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Business

Millions in compensation for customers impacted by Barclays outages

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Millions in compensation for customers impacted by Barclays outages

Barclays is to pay millions in compensation for recent IT outages which prevented customers from banking.

The lender said it expects to pay between £5m and £7.5m in compensation to customers for “inconvenience or distress” caused by a payday outage last month, the influential Treasury Committee of MPs said.

The glitch began at the end of January and lasted several days.

Money blog: Tourists banned from driving in Spanish town

This was caused by “severe degradation” in the performance of their mainframe computer, a large computer used by big organisations for bulk data processing.

It resulted in the failure of 56% of Barclays’s online payments.

Up to £12.5m, however, could be paid when all outages over the last two years from January 2023 and February 2025 are factored in, the committee said.

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It would be by far the biggest amount of compensation paid by a firm in the last two years. Irish bank Bank of Ireland would be the second having issued £350,000 in compensation.

The committee is investigating IT problems at all banks that prevent or limit customer access.

Why does this keep happening?

As part of their inquiries, banks said common reasons for IT failures included problems with third-party suppliers, disruption caused by systems changes and internal software malfunctions.

The responses were received before last Friday’s online banking failures which caused difficulties for millions on payday but the committee said it would request data on the latest disruption.

A recurring problem

The nine top banks written to by the Treasury Committee accumulated 803 hours of unplanned outages, they said, equivalent to 33 days.

These hours were comprised of 158 individual IT failures. Barclays’ payday failure is not captured in the numbers.

As a result, the bank with the longest outages was NatWest with 194 hours of failures.

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