Deutsche Bank pays £200m in bonus tax
Friday 05 February 2010
Deutsche Bank will pay the Treasury £200m as a result of the one-off "supertax" on bonus pools. The company is the first major bank to put a figure on how much it will have to shell out as a result of the levy, which will be spread across its employees globally.
The German bank has set aside around €500m (£436m) in "variable" compensation for its 8,000 staff in London. The 50 per cent tax covers all bonus payments above the first £25,000.
The average bonus in London will therefore be £54,600, over and above bankers' regular salaries. However, top earners will take home many times that figure.
The Chancellor, Alistair Darling, has estimated that the supertax will raise £500m. JP Morgan bonuses, unveiled last month, are already expected to contribute more than £300m to the Treasury's coffers, which combined with Deutsche's payment means that the initial figure has already been covered by just two banks.
The numbers were revealed alongside Deutsche Bank's final results, which showed that Germany's biggest bank rebounded in the fourth quarter reporting a net profit of €1.3bn, although that was flattered by a one-off tax gain. It compares to the previous year's record fourth-quarter loss of €4.8bn.
For the year, Deutsche reported net income of €5bn against a net loss of €3.9bn in 2009. However, analysts were concerned about a fall-off in earnings at the investment bank in the final part of 2009.
Overall compensation at Deutsche increased to €11.3bn from €9.6bn, although the ratio of pay to revenue fell to 37 per cent from 44 per cent. Chief executive Josef Ackermann said senior bankers had met at the World Economic Forum at Davos where he had urged "self-regulation" of bonuses to stave off a regulatory backlash amid mounting public anger over the issue.
Deutsche Bank is raising basic salaries but has introduced clawback arrangements if bankers' actions create losses with a much higher weight given to pay in shares.
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