Investment Banking in Australia | Top Banks List | Salary | Jobs

Updated on April 30, 2024
Article bySayantan Mukhopadhyay
Edited byAshish Kumar Srivastav
Reviewed byDheeraj Vaidya, CFA, FRM

What Are Investment Banking In Australia?

Have you ever thought about investment banking in Australia? Yes, it may be negligible compared to the revenue and market share in the USA and Europe, but does Australia still have hope?

Investment Banking in Australia

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It is a very booming sector in the country providing top class financial services to the people. This article will explore all aspects of investment banking in Australia and understand how much potential Australia has in making it big in investment banking.

Investment Banking In Australia Explained

The Australian market is rising even if the figures do not say so. However, if we look into the opportunities created by the foreign banks in the Australian market, we would say there is still hope that the Australian market will return strongly.

And we will wait to see whether investment banking in Australia will be able to make a dent soon!

Investment Banking in Australia

Source: Macquarie.com

Australia may not be the most attractive place for investment banking, but it has shown promise of growth. Many investment banks have seen the potential and started exploring the Australian market. For example, regarding Australian investment banking, we can talk about Macquarie Group, which has six offices in Australia and is leading in the Australian investment banking market.

Moreover, youth in Australia has still been very positive about their investment banking career. Even if Australia has lost its ground in investment banking after the global crash, students and would-be professionals are still preparing and giving interviews for the investment banking domain.

The investment banking sector of the country is under the regulation of the Australian Prudential Regulation Authority (APRA), the Australian Securities and Investment Commission (ASIC) and some other critical regulatory bodies. These organisations ensure that the banks operating in the financial sector are doing so ethically and legally within the boundaries of their rules and regulations. This ensures that the system of Australian investment banking is robust, transparent and customer friendly.

And this is all good news. And Australia is an emerging market that can show much potential soon. So investment banks need to tap into opportunities.

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Services Offered

To understand what services Australian investment banks offer, we will pick one of the top investment banks in Australia and peep into their services. It will help us understand what Australian investment banks provide to their customers.

  • Advisory and Capital Markets: Even if Australia has been doing poorly in investment banking, the approach of top-notch investment bankers is still customer-centric. The advisers are trained to serve their customers first and think about profit second. And when it comes down to the corporate finance capabilities of top investment banks in Australia, they have significant expertise that has still helped the Australian market float.
  • Asset Finance: The investment banks in Australia are experts in providing various finance and asset management solutions. From aircraft to mining, rail to technology, they offer every possible asset finance service customers would like to get assistance.
  • Financing: The Australian market has one benefit – it is an emergent market. Thus, the opportunities are limitless. And investment bankers all over Australia have been utilizing this advantage as much as possible. They are everywhere, from lending and investing to commodities and energy/resources.
  • Asset Management: Australian investment banks are not only handling Australian assets; they are also well-equipped to drive global demand. They have 100+ strategies and several teams to outgrow customers’ expectations. (Also, have a look at asset management).
  • Research: Equity research is the holy grail of every business. And Australian investment banks are the centers of excellence in research. Looking at a company from various perspectives and having thoughtful processes allows the banks to transcend every limitation. Their expertise knows no bounds, from consumer, demographics, environment, and energy to renewables, utilities, telecom, and materials; their expertise knows no bounds.
  • Trading and Hedging: Australian investment banks can handle the trading and capital market equally. They provide 24-hours access to their customers in global market conditions, price-making solutions, and global trading. They also help their customers with market research and technical and fundamental analysis.

These are the services top-notch Australian investment banks provide to their customers. And they are constantly uplifting their games and providing cutting-edge solutions to their customers. The activities of the banks in the country have a lot of influence of the domestic and global market conditions. If the financial markets are strong, the banks also perform well, meeting the customer needs in an efficient and timely manner. Low and weak market condition influence it negatively.

List Of Top Investment Banks In Australia

Australia is not doing great in investment banking. In the first half of 2016, investment bankers in Australia brought in the lowest revenue since 2010, i.e., $591 million. According to Dealogic, Australia’s investment banking revenue had dropped by 23% to $678 million in the first six months of 2016. But still, amid the clouds, few investment banks did exceptionally well. We will look at the list of top ten investment banks which did exceptionally well as of June 2016, according to Dealogic. Dealogic has ranked top investment banks in Australia as per the revenue and percentage of share during the first half of 2016.

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  1. Macquarie Group Limited: Macquarie Group Limited took the first spot in revenue and market share. The income of Macquarie Group Limited was $119 million, and the market share was 17.6%.
  2. UBS: UBS was in a second position. They earned a revenue of $57 million, and the share percentage was 8.4%.
  3. Credit Suisse: Credit Suisse had cemented its feet at the third position. They generated around $37 million and 5.5% of the market share.
  4. Citibank Australia: Citibank Australia was fourth, producing around $34 million and capturing 5% of the market share.
  5. J.P. Morgan Australia Limited: J.P. Morgan Australia Limited had captured the fifth position. They earned around $34 million and captured 5% of the market ( just like Credit Suisse).
  6. The Goldman Sachs Group, Inc.: At sixth, The Goldman Sachs Group, Inc. generated around $33 million and 4.9% of the market share.
  7. National Australia Bank Limited: National Australia Bank Limited was seventh. They had generated over $29 million and around 4.3% of the market share.
  8. Bank of America Merrill Lynch: Bank of America Merrill Lynch had cemented their position at 8. They had produced around $27 million and a market share of 4%.
  9. CBA: CBA had taken the ninth position, grossing around $27 million (slightly lesser than Bank of America Merrill Lynch) and capturing a market share of 3.9%.
  10. Morgan Stanley: On the 10th, there was Morgan Stanley. They have generated around $26 million and a market share of 3.8%.

Also, have a look at the following: –

Thus, the above are some of the important investment banks in the country which are famous for their high-quality customer services and huge range of useful financial products and services which cater to the needs of the people in the country.

Recruitment Process

In Australia, the recruitment process combines both Europe-Asia and the USA. Let’s go through the process of recruitment in investment banking: –

  • Online tests: The screening process in Australia is rigorous. Thus, if you want to break in, you must go through online exams on both verbal and quantitative subjects. Once you are through, you will go over to the next step.
  • Assessment days: On assessment days, the whole scenario is different. You will be given a limited time to prepare a case study on a transaction or hypothetical situation. Then, you will prepare the presentation and present the case in front of the panel of interviewers. It is a tough screening method because it is pretty difficult to compose an expression within a short stint of time while concentrating on the content and context of the presentation.
  • Series of interviews: The panel usually gets its few best candidates after the assessment. After the assessment day, it’s time to filter out the good from the great. A series of interviews are taken, and the interview process is harder than those in the USA and Europe-Asia.

There are a few things that are different in the recruitment process in Australia:

  • Usually, people do not change careers in Australia. So whenever the recruitment process starts, only finance people apply. And that’s the reason the recruitment process needs to be more solid.
  • People who use investment banking positions are averagely older, and mostly they leave behind a long career in boutique banks or other financial institutions.
  • As the investment banking industry is smaller in Australia and all the candidates seem to have a solid background, the interview process needs to be stricter to filter out the best from the pool of candidates.

The sector has seen a lot of significant growth and expansion opportunity in areas like renewable energy and technological development. The investment banking companies in Australia focus strongly on the sustainable financing for the development of the economy as a whole and following healthy and transparent investment practices that will benefit the community significantly.

Culture

In Australia, the culture of investment banking is quite different. People working there are a bit older on average. And they do not work insanely long hours. They have holidays, and banks often get shut down, which is almost impossible in the USA and Europe. Investment bankers in Australia maintain a healthy work-life balance and run their careers smoothly. Even at a junior level, you will not need to work 100+ hours, which is hard to believe.

The offices are usually divided into two groups – married and single people. And unlike other regions (e.g., the USA and Europe), people hang out often during work hours (whenever required) and not much after work.

Every organization has a separate team that works on specific deals. For example, a group of 10 people who are passionate about M&A works on closing more and more M&A deals.

Macquarie Capital provides global investment banking services in six industry groups: infrastructure, utilities, renewables, real estate, telecommunications, media, entertainment, technology, resources, industrials, and financial institutions. However, most other investment banks in Australia focus on two sectors, i.e., energy and natural resources, because Australia is known for it.

Investment banking in Australia is quite different as the industry and market are relatively smaller. Investment bankers specifically work on focused projects instead of cramming all of them.

Also, have a look at Investment Banking Lifestyle

Overall, the investment banking industry of the economy plays a very significant role. It is an integral and dynamic part of the banking and financial landscape of Australia, continuously meeting the capital needs and framing financial strategies that are long lasting, effective and acceptable by the society, business and institutions operating within the country.

Salaries

In Australia, the average salary for an investment banker is much lower than that in the USA or Europe. And the range of salary is also very broad.

On average in the investment banking companies in Australia, an investment banker in Australia earns around $98,471 per annum, as per the data shown by Payscale.com. Here is the graph below: –

Investment Banking in Australia

source: payscale.com

Now, let us go through another graph to understand the range of salary of investment bankers and also the bonus and profit-sharing part of the salaries: –

Investment Banking in Australia

source: payscale.com

  • The salary range of investment bankers in Australia is $51,521 to $207,128. This range proves that you will not start at a higher level (in salaries) when you start your career in investment banking in Australia. But if you stick for 15 years-20 years, your salary would quadruple.
  • We also get a range of bonuses and profit-sharing, i.e., $5,000 to $100,000 and $986 to $19,866. These figures also emphasize the importance of experience in the investment banking career in Australia.
  • Experience highly affects the salaries in the investment banking market. If you have more experience, chances are you will be getting much more pay than the investment bankers who are now in the middle of their careers. And entry-level, you need to start with a salary based on industry norms.

In the next graph, we will see the gender division in the investment banking market in Australia: –

Investment Banking in Australia

source: payscale.com

  • According to this, only 10% of the people working in investment banking are female. And the remaining 90% are male. So that means we can conclude that investment banking in Australia is a male-dominated industry.

Exit Opportunities

As you already know, going from investment banking to the buyer side of the business is common. Still, in the case of the Australian investment banking market, an exit is a big no-no for candidates.

Since the career change in Australia is very uncommon, people who work in investment banking usually change jobs from one firm to another and go from a smaller bank to a bigger bank; but rarely from investment banking to private equity or hedge funds. Usually, people change jobs for more stability and better salaries, but not for exploration or because they do not like their investment banking jobs.

So, an exit is not a good option if you start your career in the Australian investment banking market. You may think of moving out of the Australian market and going into the USA or Europe. You can do it, but the issue is the migration does not yield any additional benefit. Having experience in the Australian investment banking market does not count in the investment banking industry in the USA or Europe. As a result, the candidate who has migrated from Australia to the USA or Europe must start again from the bottom (which is not a good thing).

You can still change your career (if you want to) if you cannot tolerate investment banking or want to explore more of the market in private equity or hedge funds.

This article is a guide to what are Investment Banking In Australia. We explain the services offered, along with list of banks, recruitment process & culture. You may also have a look at the following articles for learning more about investment banking: –