Bankers at Credit Suisse are set to take the biggest cut in bonuses so far in the 2011 bank reporting season. Across the group, which employs thousands in its Canary Wharf offices in London, the average bonus cut is 41 per cent. The 15 executive directors will take a 57 per cent cut.
That compares with a 40 per cent bonus cut recently announced by Deutsche Bank and an expected 30 per cent or so cut at Barclays Capital when Barclays reports its results today. Pressure is growing on Bob Diamond, the chief executive of Barclays, to give up at least some of his expected £2m bonus.
Once again Credit Suisse is paying a large proportion of its bonuses in what are known as Partner Asset Facilities. This system, first used in 2008, sees some of the bank's riskier assets transferred to its top 2,000 or so highest earners as part of their long-term bonus. Some senior staff are annoyed they have been forced to take on extra risk when they would have preferred to have received all their bonus in Credit Suisse shares.
However insiders say the first PAF scheme, made up of some $5bn worth of junk bonds and sub-prime mortgage-backed bonds, has gained some 75 per cent in value in just over three years.
Credit Suisse reported a surprise lurch into the red yesterday with a fourth-quarter loss of Sfr998m (£691m) compared with profits of just over Sfr1bn in both the third quarter and a year earlier. The chief executive Brady Dougan, pictured, who picked up Sfr9.7m in bonuses last year, said the fourth-quarter performance was "disappointing" but there had been signs of a pick-up this year.Reuse content