Swiss bank will cut employee bonuses by a billion dollars
Credit Suisse to cut bonus fund by 50 percent to $1bn due to crisis
Credit Suisse, one of Switzerland's largest banks, plans to cut its bonus pool for 2022 by 50 percent due to the crisis and negative financial results in the fourth quarter. This was reported by sources to Bloomberg agency.
According to the sources, the total amount the bank will spend on employee bonuses after the cuts will be around one billion francs ($1.1 billion), although back in 2020, $2.9 billion was allocated for this purpose. Credit Suisse management may have to cut bonuses for some employees to motivate others, and some workers may be left without bonuses altogether.
The bank has already cut its bonus pool by 32 per cent in 2021. The new pay cuts are likely to be tougher than those of rivals such as JPMorgan Chase and Citigroup, but a final decision has yet to be made.
That said, the bank has shown a willingness to implement additional bonuses in order to retain the best employees. In the middle of last year, management spent more than $300 million in one month for this purpose.
Credit Suisse has had a difficult year and has been forced to take emergency measures, such as restructuring and massive layoffs. Several senior executives in Asia and Europe have been sacked or resigned in recent weeks, including Carsten Stoehr, head of the China office, and Andrea Donzelli, head of the organisation in Italy. Credit Suisse has also had to borrow four billion francs to maintain liquidity, and the bank is expected to report a loss of 1.5 billion francs at the end of the fourth quarter.
Credit Suisse's problems were first talked about in September and in early October, a letter sent by Ulrich Kerner, the Swiss bank's chairman, to employees was published. It spoke about the "critical moment" that is coming for the bank amid preparations for a major restructuring of its different areas of business. Among other things, some divisions are expected to be divested from the banking group and continue to operate independently, while others will be sold.