Bonuses for City investment bankers and traders are set to be slashed by more than 60 per cent across the board, the biggest decline in year-end compensation for a decade.

Only the banks’ top performers, who account for less than 5 per cent of the total headcount, will take home bonuses that are at or close to last year’s level. The layer below that, including managing directors, could see compensation collapse by as much as 80 per cent, according to research by Armstrong International, the executive search company.