Trade Finance Salary Survey Report 2011 

A joint venture between Exporta GTR and Healy Hunt

THE FUTURE OF TRADE FINANCE:

The Results.
The second annual GTS salary survey has revealed that the profile of global trade and transaction services (GTTS) within financial institutions is growing. However, under-investment in the sector over the last decade has resulted in an acute shortage of candidates at the more junior end of the talent pipeline. Consequently, one of the major challenges facing GTTS is training, developing and attracting more talent to the sector. The GTS Survey gathered feedback from the major trade finance hubs and asked respondents about their salaries, bonuses, promotion prospects, the status of GTTS in their organisations and their career motivations and aspirations. The survey examined compensation trends and bonus structures and also revealed interesting insights into the mood and future of the sector. Despite the regulatory and financial pressures facing GTTS, the sector is clearly going through a renaissance and rightly so. In times when bankers face an image crisis GTTS is perceived as the acceptable face of banking as it provides vital liquidity to mature and emerging economies, finances the production and distribution of real products and lubricates the engine of global trade. We would like to thank everyone who contributed to this years survey. We encourage your feedback and have collated some of the comments in this report. As always, we invite you to contact us for further information or specific market advice. This survey should be used as a guide only.

If you would like any specific or personalised advice please contact Sarah Hutton T: +44 (0)207 496 8975 E: sarah.hutton@gtssearch.com Stephen Dodd T: +44 (0)207 496 8979 E: steve.dodd@gtssearch.com

CONTENTS
Section 1 Market Overview 2 4 5 6 9

EXPORTA GTR AND HEALY HUNT: A JOINT VENTURE

Global Trade Search (GTS), is a joint venture between Healy Hunt and Exporta GTR, the leader in events and publishing for the trade commodity and export finance sectors. GTS is a specialist search practice which works across global transaction banking in a range of product areas including structured trade and commodity finance, supply chain finance, cash management, political risk insurance and legal services. GTS and Healy Hunt are part of the Corbel Group.

Section 2 Salaries Section 3 Bonuses Section 4 Section 5 The Sector Speaks Survey Conclusions

TRADE FINANCE SALARY SURVEY REPORT 2011

GTSSEARCH.COM

Market Overview.
Banks are continuing to strengthen their trade finance capabilities, recognising that transaction banking represents a good source of low risk fee-driven business. Against this backdrop, salaries and bonuses continue to increase steadily. The overriding theme suggests that it is business as usual in global transaction services with global heads being set high targets for growth. This is also reflected in the perception of trade finance within institutions with almost 50% of respondents reporting that the status of their divisions has increased. Those in Trade and Supply Chain finance particularly reported an overwhelming appreciation of their contribution, reflecting the steady but solid appeal of the sector. However, despite the sectors good prospects GTTS faces a significant talent pipeline shortage which could impede the sectors growth. Over 63% of survey respondents had more than 10 years experience indicating that significant training and development needs to be invested in the talent pipeline if we are to avoid spiralling compensation packages for experienced junior hiring.

KEY MARKET TRENDS

Buoyant recruitment market in London and Asia across trade sales and operations. Compensation is competitive and growing at a steady rate. People working in Credit Insurance were most likely to have had a pay rise and people in origination roles enjoyed the highest increases. The increase in total compensation is due to rebounding bonus levels rather than an increase in base salaries. This year saw no base salary adjustments for lower bonus structures.

The investment banking brigade continues to look at us commercial bankers as glorified post office workers, but there is at least now the recognition that we also make some money and with maybe a lower risk of losing it.

There is no major trend towards bonuses being paid in stock or deferred instruments. There is an acute shortage of younger talent in the sector and those with less than ten years market experience are significantly under-represented. GTTS is no longer seen as the poor relation to investment banking, but the sector needs to work hard to improve its appeal to the younger generation.

TOTAL COMPENSATION ON THE RISE

The good news is that 59% of survey participants reported an increase in their total compensation package. Just over 13% reported a decrease in total compensation which may suggest that financial institutions are increasingly using bonus payments as a way of performance managing their staff. In terms of base salaries, around three-quarters reported a rise of less than 10% or no change at all, suggesting most of the increases in total compensation came from bonuses. The most likely area to see a salary increase was structured trade and commodity finance with one in three reporting a 10-30% uplift. Three-quarters of those in Credit Insurance had a pay increase.

It might not be as sexy say to DCM - but its certainly not as volatile! More needs to be done to promote GTS at universities and colleges.

TRADE FINANCE SALARY SURVEY REPORT 2011

GTSSEARCH.COM

How did your total compensation (salary + bonus) for this year compare with last year?

Higher 59.2%

No change 27.3%

Lower 13.5%

In which type of organisation do you currently work?

In which business area does your role sit?

Corporate Bank Investment Bank

54.0% 8.7%

Trade and Supply Chain Finance Structured Trade and Commodity Finance Export Finance Credit Insurance and Political Risk Other

37.7%

22.7% 15.1%

Insurer Trading House Other

5.5% 5.1% 6.7%

7.3% 17.2%

e.g. Risk Management, Financial Institutions, Project Finance, Commodity Finance

In which area of your organisation does your role fit?

How many years experience do you have in Global Transaction Services?

Origination Credit/Risk Structuring

45.6% 14.6% 21.3%

0 - 2 years 3 - 5 years 5 - 10 years 10 - 15 years

6.0% 11.9% 18.6% 19.1% 44.3%

Middle Office Back Office

10.3% 8.3%

15 years plus

TRADE FINANCE SALARY SURVEY REPORT 2011

GTSSEARCH.COM

Salaries.
To attract the best talent, salaries in trade finance are looking increasingly competitive, especially for those with 10-15 years-plus experience. However, bonuses are not necessarily following suit, with most staying well below the mega multiples often reported in investment banking. The survey shows that base salary remains the largest component of total compensation for 95% of all respondents. Even in Structured Trade Commodity Finance origination, the most highly incentivised sector, over 60% of respondents relied on base salary as the largest component of their compensation. Over the last 18 months many wholesale banks have recalibrated their compensation structures whereby salaries were increased to compensate for reduced bonus. This was not so widespread across GTTS with only 1 in 4 respondents citing an increase in their base salary to compensate for reduced bonus. This mostly affected professionals in structured trade and commodity finance and supply chain finance who enjoyed uplifts in salary of 10-30%. Three quarters of respondents received no change in salary or less than 10%.

UK & Ireland (GBP)

Tier 3-5yrs Base () Median Range All Average 56,300 29% 93,230 49% 111,560 41% 116,800 42% 50,000 - 60,000 Bonus (%) 20-30% 5-10yrs Base () 70,000 - 80,000 Bonus (%) 30-40% 10-15yrs Base () 85,000 - 95,000 Bonus (%) 40-50% 15+yrs Base () 110,000 - 120,000 Bonus (%) 25-35%

Europe (EUR)
Tier 3-5yrs Base (t) Median Range All Average 61,740 20% 84,160 34% 100,320 47% 120,710 36% 60,000-70,000 Bonus (%) 10-20% 5-10yrs Base (t) 70,000-80,000 Bonus (%) 20-30% 10-15yrs Base (t) 100,000-110,000 Bonus (%) 30-40% 15+yrs Base (t) 100,000-110,000 Bonus (%) 20-30%

North America (USD)

Tier 3-5yrs Base ($) Median Range All Average 121,600 34% 115,000 26% 146,530 45% 163,220 37% 90,000-100,000 Bonus (%) 15-25% 5-10yrs Base ($) 115,000-125,000 Bonus (%) 10-20% 10-15yrs Base ($) 120,000-130,000 Bonus (%) 20-30% 15+yrs Base ($) 140,000-150,000 Bonus (%) 20-30%

ME & Africa (USD)

Tier 3-5yrs Base ($) Median Range All Average 50,000 13% 74,470 23% 126,750 47% 141,950 38% 40,000-50,000 Bonus (%) 10-20% 5-10yrs Base ($) 50,000-60,000 Bonus (%) 10-20% 10-15yrs Base ($) 130,000-140,000 Bonus (%) 20-30% 15+yrs Base ($) 120,000-130,000 Bonus (%) 20-30%

Asia (USD) Including China, HK, Singapore, North & S.E Asia
Tier 3-5yrs Base ($) Median Range All Average 120,000 46% 133,570 39% 143,150 40% 179,800 39% 80,000-90,000 Bonus (%) 25-30% 5-10yrs Base ($) 110,000-120,000 Bonus (%) 25-35% 10-15yrs Base ($) 120,000-130,000 Bonus (%) 25-35% 15+yrs Base ($) 150,000-200,000 Bonus (%) 30-40%

Note: Median Range is the middle response of all those received, while the average may be outside this range if there are a number of responses substantially above or below the median, such as unusually high expat or investment banking packages.

TRADE FINANCE SALARY SURVEY REPORT 2011

GTSSEARCH.COM

Bonuses.
Last year, due to pressure to reduce the bonus culture in banks, our survey found that base salaries were increased to compensate for reductions in bonuses. However, this was not the case this year. Over three-quarters of respondents stated that increases in salary were not to make up for lower bonuses. Overall, bonuses are relatively stable in comparison to last years survey results with slight decreases for those with 15+ years experience (43% to 39%), but a notable increase in bonuses for those with 10-15years experience (35% to 47%). Structured Trade and Commodity Finance continues to show the highest bonus levels, though Trade and Supply Chain Finance has shown the largest increase compared to results for 2010.

The largest majority of respondents though said their most recent bonus was between 10-20% of their current base salary (a fifth of respondents), just over 10% were paid between 20-30% whilst less than 4% saw a bonus of over 150% of their salary.
Bonuses by Business Area All Trade & Supply Chain Structured Trade and Commodity Finance Credit Insurance & Political Risk Export Finance Median Range Average Median Range Average Median Range Average Median Range Average Median Range Average 3 - 5 yrs 10-20% 21% 10-20% 25% 10-20% 30% 10-20% 15% 10-20% 12.5% 5 - 10 yrs 20-30% 34% 20-30% 40% 30-40% 42% 10-20% 28% 10-20% 19% 10 - 15 yrs 30-40% 47% 30-40% 49% 40-50% 61% 20-30% 32% 20-30% 34% 15+ yrs 30-40% 39% 30-40% 37% 40-50% 56% 20-30% 35% 20-30% 35%

How was your bonus paid?

In spite of many such headlines surrounding the proposed deferral of bonuses by major global banks, the majority of respondents (70%) to the survey reported that their bonuses were not subject to deferrals nor were they paid in stock.

The highest occurrences of any type of bonus deferral were reported in the UK where one-third of respondents said they had some kind of stock-related or deferred bonus, but most saying this only applied to one-third or less of their overall bonus. This suggests that outside the glare of investment banking most of those working in GTTS continue to receive their bonuses in unrestricted cash and their employers see no reason to change it.
Was there a deferral period on any of the stock, and if so how long?

What percentage of your bonus was deferred or paid in stock?

None One third or less Between one third and two thirds More than two thirds Not sure/dont know

70.8% 15.9%

No deferral Less than 1 year 1 - 2 years

69.2% 2.8% 9.8% 12.6%

8.2% 2.3% 2.7%

3 years or more Multiple deferral/vesting periods

5.6%

TRADE FINANCE SALARY SURVEY REPORT 2011

GTSSEARCH.COM

The Sector Speaks.

Trade Finance Centres of Excellence There has been much talk about the shift of gravity in the financial world moving ever eastward, yet the survey suggests that London is hanging on to its position as the leading centre for trade finance expertise. In particular, almost 50% of respondents see London as the leader in the provision of structured trade and commodity finance (STCF), with Geneva coming in a distant second. Even those based in North America and Asia reportedly still look to London for the lead. London maintained its leading role as the centre for trade & supply chain finance (SCF), although to a lesser extent as it was more closely followed by New York, Hong Kong and Singapore. Within SCF, there seems to be a more regional focus, with those based in North America seeing New York as the leading hub, while those in Asia following the lead of Singapore.

Where do you perceive to be the centre of excellence for Structured Trade and Commodity Finance?

Paris Hong Kong Other Singapore New York

1.7% 6.2% 7.5% 7.7% 11.8% 16.8% 48.4%

Our salary increases were negligible and did little to cover inflation & cost price increases.

Geneva London

Where do you perceive to be the centre of excellence for Trade & Supply Chain Finance?

Paris Other Geneva

1.3% 7.0% 7.2% 11%

What seems to be essential is being able to promote GTTS to prospective graduates, as other areas of banking continue to be more attractive. It is still not perceived as prestigious as working in the investment part of the bank.

Singapore

Hong Kong New York London

13.8% 18.1% 41.6%

TRADE FINANCE SALARY SURVEY REPORT 2011

GTSSEARCH.COM

Its a challenge to get a start in an international-related career. Everyone I work with has more than 30 years of international banking experience. Its like a club thats hard to get admitted into.

The Future of Trade Finance Fresh Blood Given that the largest proportion of survey participants (44.3%) had at least 15 years experience in the industry, there is a need to figure out where the next generation of talent is coming from. One of the most interesting things to come out of the survey was the confirmation, that GTTS is facing a talent pipeline shortage. Of the respondents, almost 65% had more than 10 years experience, while those with less were significantly under represented suggesting that the sector has not sufficiently invested in its emerging talent (see page 4). When asked whether working in trade finance has become a more attractive career option for graduates entering the financial services industry; a resounding 60% said yes. The most encouragement came from Africa, while the UK recorded the least. In terms of the most attractive business area to join, STCF and SCF led the way, while only 10% of respondents recommended joining the Export Credit space, including only 30% of those who work in this area. Last years survey highlighted the lack of university education held by those within the sector. Many trade professionals started their careers in back office functions getting a solid grounding in documentation and
In which of the 3 below areas do you perceive there to be the greatest career growth opportunity?

the mechanics of trade before migrating to the front office to perform origination and structuring roles. However, this is not the usual career trajectory for a graduate trainee who is typically fast-tracked to the front office after a number of brief rotations in credit, operations and support. This leaves the sector with a conundrum. How do you lure fresh graduate talent into GTTS whilst still providing a middle-office apprenticeship model? In addition, how do you foster a sales mentality in the middle office to capitalise on those with the right experience? Part of the talent shortage that the sector is facing is due to poor PR. Investment banking has always been perceived as more exciting than global transaction services which is why the majority of graduates go into it. However, when you look at the technical and personal attributes required for a successful career in GTTS, the sector looks like a challenging and worthwhile option. Despite the increased profile of trade finance, and the fact it is not threatened with the same level of job cuts as witnessed in investment banking, it seems that there is still a fair amount of work to do to make the industry more attractive to newcomers.

Do you have the perception that Global Transaction Services has become a more attractive career option for graduates entering the financial services industry?

Structured Trade & Commodity Finance Export Credit Agency Backed Financing Trade & Supply Chain Financing

Yes 47.4% No 11.2%

61.2% 38.8%

41.4%

TRADE FINANCE SALARY SURVEY REPORT 2011

GTSSEARCH.COM

Values, Motivations and Aspirations. We asked survey respondents what they valued most about their current role and what would motivate them to move. With respect to their current role the top 3 values by a long way were work/life balance, team atmosphere and role responsibility. Other factors such as total compensation potential, career progression and skills development were significantly less valued.

Our salaries were increased, but not to compensate for bonus, but to catch up with market standard.

However, given that increased compensation potential and career progression were cited overwhelmingly as the main motivation for professionals wanting to change jobs we conclude that the talent pipeline is frustrated by the current financial status and career opportunities within the GTTS sector.

Of the following, do you value most in your current role? Answer Options Work / life balance Team atmosphere (colleagues) Role responsibility Base salary Employer reputation Skills development Corporate title / career progression Bonus potential Status of GTTS within the organisation Figures will not add up to 100% as respondents were restricted to up to three choices only If you were to move roles, what would motivate you to do so? Answer Options Increased compensation potential Corporate title / career progression Work / life balance Responsibility Skills development Employer reputation Status of GTTS within the organisation Team atmosphere (colleagues) Figures will not add up to 100% as respondents were restricted to up to three choices only Response Percent 71.6% 38.6% 37.2% 29.7% 24.4% 22.3% 22.1% 18.5% Rank 1 2 3 4 5 6 7 8 Response Percent 57.1% 43.3% 42.7% 32.9% 21.6% 20.6% 18.7% 18.7% 9.6% Rank 1 2 3 4 5 6 7= 7= 8

We havent seen a change in salary since 2008. We have little bonus potential.

Our salary increases were negligible and did little to cover inflation & cost price increases.

TRADE FINANCE SALARY SURVEY REPORT 2011

GTSSEARCH.COM

Survey Conclusions.
Market sentiment may be all doom and gloom, but as long as there is global trade there will be a role for GTTS. Whilst the hiring trend is stable, almost 60% of respondents received larger total compensation this year than last, and mostly through increased bonuses, so the wheels most certainly continue to turn. The challenge for GTTS is how to bring new blood into the sector. With the majority of respondents having been in the industry over fifteen years, much needs to be done to encourage fresh talent, and provide the right mix of compensation to keep it, even after investment banking recovers.

Over to you.
Feedback from survey respondents has been overwhelming. To the right are some of the comments and suggestions that we look forward to taking on board for the 2012 survey.
OVER TO YOU
Has the technical knowledge of trade finance in the market been eroded during recent years? You might ask people when they last got promoted and when / if they next expect to get promoted - youll probably find that promotion is woefully slow in this industry unless you jump ship to achieve it. As the job markets around the world contract, salaries become less of a central factor; individuals become more focused on keeping their jobs. It would be interesting to see how the economic downturn is affecting people and what their experiences are with internal HR, outplacement agencies and recruitment firms in their quest to find a new job, should those out of work be thinking of doing what they were doing before or seeking a complete career change? I would say that a combination of aspects such as base salary, bonus potential and benefits based on results and also career oportunities, responsibilities and work / life balance, will continue to play a very important role in the industry particularly in the area of international and structured trade related transactions.

Still not perceived as prestigious as working in the investment part of the bank, but now receiving a higher general profile in the financial markets.

Next time ask people if they had changed jobs in the last 12 months and if so by what percentage did their salary increase and if their bonus was guaranteed.

The survey should include questions on whether the respondent is a local hire or expatriate and whether the respondent would consider relocation in order to take up a new job opportunity.

TRADE FINANCE SALARY SURVEY REPORT 2011

GTSSEARCH.COM

A joint venture between Exporta GTR and Healy Hunt.

Our depth of expertise within GTS means that we have successfully completed a range of search assignments from senior associates through to team heads covering origination and structuring through to syndication, credit and risk and portfolio management. We have a patient and enduring approach to all mandates with a highly targeted search mentality. It is an approach that has earned us many long standing partnerships with our clients.