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Bonuses for London commodities and rates trading chiefs plunge

[LONDON] Plunging commodity prices and rock-bottom interest rates this year have cut bonuses for managing directors (MDs) on commodity and rates trading desks in London by as much as 60 per cent.

Figures from salary benchmarking site Emolument show that commodities managing directors bonuses this year averaged 150,568 pounds (US$234,886), compared with 373,000 pounds last year.

The average bonus of managing directors on rates trading desks this year stands at 296,902 pounds, down just over a third from 460,000 pounds last year.

Base salaries have risen a little, however, meaning overall compensation has fallen 38 percent for commodities MDs and 23 percent for rates MDs. Many banks have tried to retain and attract staff while circumventing the backlash against bankers'bonuses since the financial crisis by paying higher salaries.

It is a similar picture at the lower end of the earnings spectrum. Overall compensation for an associate-level worker on a commodities desk in London was almost 95,000 pounds, down 30 percent from 138,000 pounds last year, Emolument said.

And expectations that the worst is over for banks' financial market trading look premature, with the latest earnings and volumes suggesting the pressure remains intense. Fixed income, currency and commodity (FICC) trading desks are unlikely to be expanded any time soon.

Emolument is a real-time bonus and salary-benchmarking site to which individuals in finance and other professional services contribute anonymously. The 2015 figures were derived from up to 958 contributions since Jan. 15.