(Bloomberg) -- Credit Suisse Group AG is considering cuts of at least 10% to its bonus pool after a series of charges hit the Swiss bank’s profit last year, according to people familiar with the matter.
The lender is finalizing discussions for 2020 discretionary payments and will begin informing employees of its decision over coming weeks, the people said, asking not to be identified because the matter is private. Reductions to the overall pool, which may extend to 15%, would mark a change from the previous two years when it was left almost untouched.
Credit Suisse said on Friday that it expects to post a fourth-quarter loss after setting aside $850 million to cover the cost of penalties related to U.S. legal cases as Chief Executive Officer Thomas Gottstein seeks to tackle legacy issues in his first year in charge. The bank also recently announced a $450 million impairment on a hedge fund investment and warned last month that it risks missing a key profit target because of the impact of the pandemic.
A spokesman for Credit Suisse declined to comment.
Covid-19 has left banks facing rising loan losses and the crisis makes it more difficult politically to hand out excess cash to well-paid staff at a time of economic misery for many. At the same time, many banks have signaled that they will increase bonuses for traders after a strong year for markets. Deutsche Bank AG is considering raising bonuses for its fixed-income traders by roughly 10%, while the total amount of variable compensation will probably be slightly lower than last year, people familiar with the matter said last month.
Goldman Trading Bonus May Jump Nearly 20% After Year’s Windfall
JPMorgan Chase & Co. and Goldman Sachs Group Inc. will increase bonuses for traders by as much as 20%, Barclays Plc is weighing raises of about 10% and Bank of America Corp. is considering keeping the pool flat, Bloomberg News has reported.
Credit Suisse’s overall bonus pool for 2019 was reduced by 1% from a year earlier to 3.17 billion francs, and stayed flat at 3.2 billion Swiss francs the year before.
Gottstein signaled in an interview with the Financial Times last month that the bank was considering lower bonuses.
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