Italian private banks engage in aggressive recruitment war

Italian private banks are engaged in an aggressive recruitment war for bankers serving ultra-high-net-worth individuals. This competition has led to unprecedented compensation structures designed to lure top talent.

In a recent high-profile case, BNP Paribas successfully intercepted a group of bankers that Lombard Odier had been negotiating to acquire from Mediobanca. To secure the deal, BNP Paribas offered contracts including upfront payments of 1% to 3% of the assets overseen by the bankers, alongside a significant portion of their future earnings. Such deals can reach tens of millions of euros.

To mitigate risk, these agreements typically require bankers to remain with the institution for three to five years or face partial reimbursement of their signing bonuses. While these tactics have disrupted the traditionally rigid Italian private banking system, some executives warn that such aggressive 'buying' of bankers may ultimately prove costly and counterproductive.