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UBS increasing Asia investment banking bonus pool by 6% : sources

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UBS Group boosted the 2017 bonus pool for its investment bankers in the Asia-Pacific region by about 6 per cent, reflecting a rebound in dealmaking and efforts to retain junior staff focusing on China, according to people familiar with the matter.

[HONG KONG] UBS Group boosted the 2017 bonus pool for its investment bankers in the Asia-Pacific region by about 6 per cent, reflecting a rebound in dealmaking and efforts to retain junior staff focusing on China, according to people familiar with the matter.

Total compensation for junior bankers in the region rose by about 12 per cent on average, the people said, asking not to be identified because the information is private. Some junior bankers focusing on China received raises of 15 per cent to 20 per cent as UBS seeks to reverse a series of defections to Chinese corporates and private equity firms, one of the people said.

UBS, like many of its competitors, is increasingly tilting bonus payouts towards the biggest revenue generators and younger bankers who might otherwise defect for other industries. The larger bonuses in Asia mark a reversal from the previous year, when the regional investment banking payout pool was cut by about 15 per cent.

The average total compensation for senior managing directors in Asia-Pacific, including bonuses, was about US$1.3 million for last year, the people said. UBS spokesman Rob Stewart declined to comment on the payouts.

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UBS benefited from a revival in China equity and equity-related deals last year and a recovery in Australia in the second half, the people said. Those two markets have traditionally been UBS strongholds.

Pre-tax profit at UBS's regional investment bank, which also houses brokerage operations, jumped 66 per cent to 500 million Swiss francs (S$706.3 million) in 2017, according to its latest earnings report. UBS's ranking for Asia-Pacific equity offerings rose to third in 2017 from fifth a year earlier, data complied by Bloomberg shows.

Even as profit rebounded, the bank suffered an exodus of China bankers last year, including Jiang Guorong, who was country head of corporate client solutions. Like other banks, UBS has also found it hard to retain China dealmakers who are being wooed by potentially higher compensation at buyout funds.

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