Despite Brexit, bankers still like London for one big reason: Pay

London continues to remain lucrative for bankers despite the uncertainty over the country’s withdrawal from the EU.Data published from human resources firm Emolument, which analyzed 4,475 salaries and bonuses from front- office bankers (traders) working in London, Paris, Frankfurt and Milan, found that the U.K. capital was the most rewarding in terms of pay.

“If London banks were to move their workforce to other European cities, average compensation packages would decrease. From analyst to MD (managing director), London offers the highest salaries and bonuses in the market,” Emolument said in its findings, which was first published last year but is regularly updated.

Different countries have different remuneration structures. In Paris, bonuses can account for as much as 49 percent of a banker’s total compensation, according to Emolument, with a managing director’s bonus being approximately £153,000 ($200,254) out of a total £312,000 compensation package.

Frankfurt can pay lower bonuses but have higher base salaries. For example a vice president at a bank can get £108,000 in Frankfurt compared to £90,000 in Paris, Emolument said.

“The numbers (salary) are good in London and for me personally, it is a lucrative business when dealing with clients. Moving out of here would mean the risk of losing key clients to other players on the street. When you lose business, you lose money too,” one banker told CNBC on the condition of anonymity due to the sensitive nature of the subject. They added that base salaries in London were better due to it being the traditional financial heart of Europe. “If we lose that status, then salaries could come down a bit.”

Emolument also surveyed nearly more than 1,000 executives working in these cities on how they feel about their workplace. While Frankfurt made it to the top of the charts for best work-life balance, Paris was the worst.

Government officials and policymakers from these European cities have been lobbying banks to shift bases to their region. Speaking to CNBC last week, Italian Finance Minister Giovanni Tria said Milan is in the race to become a financial capital.

“Milan is already the main center for government bond trading. As soon as Italy’s financial system strengthens, Milan can become a top financial center. Obviously, this also depends on the general condition of the country,” Tria said. The southern European nation fell into a technical recession in the last quarter of 2018 and the economy is currently dealing with the second-highest debt pile in the euro area — at about 130 percent of its debt-to-gross domestic product.

Brexit continues to dominate headlines. U.K. Prime Minister Theresa May is facing a crunch series of votes this week that will determine the immediate course of the U.K.’s withdrawal and future relationship with the EU.

Even since the U.K. voted to leave, many banks have been contemplating some sort of a move to the continent. Slow client activity and concerns around a potential no-deal Brexit are likely to have sharpened those thoughts.

“The uncertainty of what type of Brexit we’re going to get has definitely muted a lot of the clients’ appetite which has had a knock-on effect on the volume of business. A lot of people are on the fence. So yes, less volume/ less revenue will impact compensation,” Joseph Leung, the founder and managing partner at recruitment firm Aubreck Leung, told CNBC earlier this month.

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