Although Morgan Stanley is rumoured (Dealbreaker) to be reducing the amount it offers to subsidise US students struggling with MBA fees, recruiters this side of the Atlantic say generous banking sign-on bonuses are set to remain static.

In 2007 the average sign-on for a student going into banking after an MBA course was £22k, according to the London Business School. This year, Merrill Lynch has reputedly increased its sign-on pay from $30k to $40k to compensate for the falling dollar.

The head of MBA hiring at another US bank says sign-on payouts are set to remain static – “There’s absolutely no indication of them being slashed.”

Figures from recruitment firm Cornell Partnership indicate that average pay for a first-year associate in a bulge-bracket firm was around £110k last year (including £60k basic, £20k stub/sign-on bonus, and a £30k bonus paid in January); second-year associates earned £150k; and third years earned an average of £200k plus.

With the MBA course at LBS costing a total of £44.8k and students able to earn up to £12k during their summer internship, this suggests a net present value of £195k over four years (assuming the student starts work in July of his/her second year and the cash would otherwise be sat in a bank account earning interest at 6%).

Even if interest rates rise to 8% and bonuses are slashed, MBA students who manage to land a banking job will still be heavily in the black over a four-year period.

The big issue is, naturally, whether MBAs will be able to land a role in the first place and whether they will be made redundant before the four years are up. Some LBS MBAs are opting to work in Asia rather than London, and one says that those without summer internships are panicking.

The head of MBA recruitment at the US bank says they have reason to be panicking: “It’s going to be a lot, lot harder to land a role without an internship next year.”