Cash-strapped Credit Suisse considers halving its bonus pool following £1.7bn loss
Credit Suisse is considering cutting its bonus pool by 50 per cent as the embattled investment bank seeks to cut costs, Bloomberg has reported.
The Swiss asset manager faced a challenging 2022 when its share price sunk 67 per cent.
In the nine months to September 2022, Credit Suisse swung to a pretax loss of CHF1.94bn (£1.73bn), compared to a profit of CHF1.06bn (£946.4m) profit in the same period the previous year.
Credit Suisse also announced a major restructuring plans last October amidst rumours it was in danger of collapsing.
The firm sought a cash injection of £3.46bn from investors via a share sale backed by the Saudi National Bank and warned it would need to cut 9,000 jobs by 2025.
The bank has been hit by a string of scandals – from the collapse of Archegos Capital Management to Greensill.
When announcing the restructuring plan in October the bank admitted: “Any reputational harm resulting from prior events or from reactions to our strategic initiatives may make it more difficult to implement those strategic initiatives or achieve the related targets and objectives.”
Major banks face plummeting income from IPOs and mergers and acquisitions and this severely dented revenue is forcing them reconsider bonus plans.
Goldman Sachs was reported to be considering a 40 per cent cut to the size of its bonus pool while it will start cutting 3,200 jobs today. The Financial Times also reported that the bank’s private jet policy will come under review.
Wall Street giants JP Morgan, Citi and Bank of America are also reported to be considering cutting their bonus pool by 30 per cent.
Credit Suisse declined to comment.