Jon Terry, who leads PwC's global Financial Services HR Consulting practice, told The Times that bonuses could be down "possibly by 10% in aggregate" and some lower performing bankers could even see bonuses down by 25% if there performance has been average.
Terry blames management anxiety about Brexit, Trump's trade policy, and the state of the eurozone. An unnamed banker told the paper: "Costs are one area you absolutely can control."
Average bonuses in M&A departments across the City fell by 20% in 2016, according to salary benchmarking website Emolument. Only sales and research staff saw an increase, while bankers in origination departments took a 30% cut to their bonuses on average. As a result, just 17% of bankers surveyed by Emolument said they were happy with their bonus.
Investment banks, particularly in the US, enjoyed a strong end to the year but fees across the year are down by 7%, according to Thomson Reuters.
Big banks are also increasingly losing business to highly lucrative boutique firms, whose deep expertise and absolute discretion is often favoured for things like M&A deals. 30 person London firm Robey Warshaw mad $105 million in fees last year, for instance, and the ten biggest investment bank's share of market revenue declined by 1.7% last year.
In December last year, HSBC said if Britain ends up having a "hard Brexit" - leaving the European Union without access to the Single Market - and President-Elect Donald Trump implements his protectionist trade plans, the combination could kill $1.2 trillion of global trade value.