EBA Report Exposes Persistent Gender Pay Gap Across EU Banks & Investment Firms

A new report from the European Banking Authority (EBA) has revealed a significant and persistent gender pay gap in the EU financial sector, with women in both banks and investment firms earning substantially less than their male counterparts. The findings are part of the EBA’s 2023 Report on Remuneration and Gender Pay Gap Benchmarking, marking the first time that a comprehensive analysis of gender disparities has been released alongside its annual remuneration data.

Widening Gender Pay Gap & Unequal Representation

In 2023, female employees in banking institutions earned on average 24.48% less than men, with this figure rising to 32.0% in investment firms. The disparity was nearly as stark among senior "identified staff" — those whose decisions have a material impact on risk profiles — where the gap reached 21.64% in institutions and 31.74% in investment firms.

The underrepresentation of women in high-paying roles is cited as the key driver of the gender pay gap. Women occupied just 33.45% of top-paying roles in institutions, and a concerning 12.99% in investment firms. This is despite near gender parity across total staff numbers in banks, where women held a median representation of 51.65%, compared to a significantly lower 35.43% in investment firms.

Bonuses Continue to Climb in Investment Firms

The EBA also highlighted a surge in the ratio of variable to fixed remuneration among identified staff in investment firms. In 2023, this ratio averaged 145.85%, down from 191.42% in 2022, but still far above the 59.59% average seen in banking institutions. The increase follows the regulatory shift under the Investment Firms Directive (IFD), which in 2022 removed the previous cap on bonuses (100% of fixed pay, or 200% with shareholder approval) that was still in place for banks under the Capital Requirements Directive (CRD).

Notably, the highest bonuses were paid in areas such as dealing on own account and underwriting and placing of instruments, where ratios reached an extraordinary 521%. In contrast, other business lines maintained bonus levels between 35% and 120%, indicating substantial pay volatility tied to specific high-risk activities.

Calls for Stronger Gender Pay Gap Governance

The EBA emphasises the need for both financial institutions and supervisory authorities to scrutinise and address the root causes of the gender pay gap. It will also revise its internal governance Guidelines to improve oversight of gender-related issues, aiming to foster more equitable remuneration and representation practices in the sector.

The benchmarking was conducted under the legal mandates set out in Article 75(1) of the CRD and Article 34(1) of the IFD, with data collected according to EBA Guidelines EBA/GL/2022/06 and EBA/GL/2022/07.

Implications for the Sector

These findings cast a spotlight on the entrenched inequality in remuneration structures within the EU financial industry. While institutional stability appears consistent, the evolving remuneration frameworks and gender disparities raise questions about long-term inclusivity and risk governance. As the regulatory environment continues to evolve post-IFD, investment firms in particular may face growing pressure to align their pay practices not just with performance, but with fairness and transparency.

Read the press release here.