Bottom tier investment banks cost on average $64,000 more per employee to run than top firms, according to a new report, which suggests they could easily save as much as $2bn (€1.4bn) a year by cutting their bloated expense base.

The average non-compensation costs per employee at bottom quartile investments banks are $212,000 per year versus $148,000 at top firms, according to analysis by consultants at McKinsey, which found that bottom tier banks could save between $465m and $2.1bn without seriously harming their business.