America's biggest bank, JPMorgan Chase, has announced a sharp fall in investment banking profits and a massive cut in its investment bankers' pay.
Profits at the investment bank, which employs 11,000 in London, more than halved in the final quarter against both the third quarter and the same quarter last year.
While pay and bonuses for the whole of 2011 have fallen by only 8 per cent from an average of $370,000 (£241,000) a head to $341,000, they have been slashed by 37 per cent in the final quarter. Given that investment bankers' basic pay has risen sharply in recent years, that suggests bonuses in the final quarter have been more than halved.
It is likely that rival investment banks Goldman Sachs, Bank of America Merrill Lynch and Morgan Stanley will reveal equally deep cuts to bonuses when they report next week.
JPMorgan Chase saw its total profits rise 9 per cent to a record $19bn last year as it focused its business on the US and kept clear of some of the riskier areas in investment banking. But fourth-quarter profits fell 23 per cent to $3.7bn as the bank took big hits on its exposure to eurozone sovereign debt.
Investment bank profits fell 52 per cent to £726m in the final quarter.