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European banks have spent more than €1.1bn on axing senior staff since 2018, underlining the extent of the restructuring the industry has undergone in recent years.
Deutsche Bank, HSBC and Santander collectively paid out nearly €850mn in severance to their most senior employees — so-called material risk takers — between 2018 and 2024, according to a Financial Times analysis of regulatory fillings and company accounts.
Société Générale, BNP Paribas, Barclays and UBS handed out €275mn between them in severance to senior staff during the same period.
The €1.13bn severance pot was shared between 2,100 material risk takers across the seven lenders, the FT analysis showed — equivalent to about €540,000 per banker.
The payouts highlight the extent to which several large European banks, such as Deutsche and HSBC, have implemented major restructuring drives in recent years, while others have sought to reshape their investment banks to adapt to shifting market demands.
Banks often target expensive layers of senior staff as part of restructurings to maximise cost-cutting.
Santander had the highest average severance payout for material risk takers across the seven-year period at €780,000, followed by SocGen and HSBC, which had average packages of €737,000 and €678,000 respectively.
The largest single severance payment to a European banker was €11.2mn, awarded by Santander in 2021. Deutsche also made two individual payments of €11mn in 2018 and 2019.
One senior financial services recruiter said: “It’s much harder to get on these [severance] lists than you might think. Some senior people who have been there a long time want to get out but can’t pull off lucrative exits.”
“The packages are also much more attractive today than they used to be,” they added.
Deutsche and HSBC — which accounted for more than half of the total severance awarded — have undergone strategic overhauls since 2018, with the German lender axing its equities trading business in 2019.
At the onset of its biggest restructuring in a generation in 2019, Deutsche’s chief executive Christian Sewing promised to shave 18,000 jobs from the bank’s 92,000-strong headcount by 2022. The lowest he managed was 83,000 at the end of 2021, and the bank has since gone on a three-year hiring spree with staff levels reverting to almost 90,000 at the end of last year.
However, Deutsche has targeted redundancies at its senior ranks more than any other European lender since 2018, cutting 70 per cent more material risk takers than HSBC during that period, according to the FT’s analysis. Deutsche cut 685 material risk takers during the period, compared with 400 at HSBC.
Meanwhile, HSBC has gone through several restructurings in recent years.
Noel Quinn, who stepped down as chief executive last year, aimed to cut 35,000 jobs and $4.5bn of costs annually. Last October, new chief Georges Elhedery announced his own reorganisation, redrawing the bank’s operations between east and west. HSBC has since announced plans to shut key parts of its investment banking division in the UK, US and Europe.
Other banks, such as Barclays, have carried out smaller redundancy rounds on an annual basis. The British lender is in the process of cutting 200 jobs in its investment bank, according to a person familiar with the matter, a similar level to last year.
Despite paying out the lowest level of severance to its “key risk takers”, UBS last year spent $735mn (€643.7mn) on total group severance payments to nearly 5,700 staff as it integrated its former rival Credit Suisse. The average payout at the Swiss bank was $129,000.
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