Wall Street Posts 120 Trillion Won in Profits...Bonus Party Expected Again This Year

AI Investment Boom, Active M&As Boost Performance
Consumer Finance Division Remains Solid
Inflation and Bond Market Instability Persist

Financial firms on Wall Street are expected to pay employees record-high bonuses again this year.

According to The Wall Street Journal (WSJ) and other outlets on the 6th (local time), Thomas DiNapoli, the Comptroller of New York State, projected that the securities industry in New York State will post profits exceeding $90 billion (120 trillion won) this year. This surpasses last year’s $65.1 billion (87 trillion won) by a significant margin.

Wall Street Sign (The Asia Business Daily = Yonhap News)

This robust performance has been driven by the artificial intelligence (AI) investment boom; an increase in mergers and acquisitions (M&A); revitalized initial public offerings (IPOs); and a surge in trading volume due to heightened market volatility. WSJ reported that major banks are posting solid results not only from their Wall Street operations, but also in their consumer finance divisions.

Reflecting this earnings growth, bonuses for securities industry employees are also expected to increase. According to the Comptroller’s Office of New York State, last year Wall Street paid out a record $49.2 billion (66 trillion won) in total bonuses based on nominal value. The average bonus per employee was $246,900 (330 million won), and the average total compensation per employee, including base salary, reached $561,770 (750 million won).

Wall Street’s performance also affects the fiscal situation of New York State and New York City. As high-income earners on Wall Street receive larger bonuses, tax revenues, such as income taxes, also rise. In fact, New York State projected a 7.3% increase in bonuses for the financial and insurance industries when formulating this year’s budget.

The labor market is also showing signs of vigor. Last year, employment in New York City’s securities industry grew by 3.5% year-on-year, reaching 207,400 employees. Preliminary data shows that an additional 5,300 jobs are likely to be created this year as well.

However, there remains uncertainty as to whether this Wall Street boom will continue. WSJ cited the fact that the U.S. Federal Reserve raised its benchmark interest rate last month, for the first time in several years, due to rising inflation. WSJ noted, "Overall economic prospects remain cloudy amid geopolitical tensions and bond market instability," and added, "Third-quarter earnings releases from U.S. major banks, scheduled for next week, will serve as a key indicator for whether Wall Street’s boom will persist."

This content was produced with the assistance of AI translation services.