European Bank, crowded cut employee bonus

Photo: Reuters

Investment banks in Europe will cut employee bonuses by 20% which will be distributed in the coming weeks. This is done to prevent the widening of differences with its competitors in the U.S..

The consultants and bankers predict, banks such as Barclays, Credit Suisse, and UBS will reduce all employee bonuses on the performance results of 15% over 2012.

"It's part of the reduction of some of the head, as the business activities of investment banks back to the bank. But bank officials in Europe are trying to restore investor confidence and push bonuses in response to increasing reputation," said PwC analyst Tom Gosling as quoted by CNN on Monday (02/04/2013).

But analysts say banks are currently confronted by the problem of declining investor, regulator tight, and employee issues.

"Some middle managers hoping to get a higher bonus, in reply to the improved performance of the bank. But the board seems to have acted differently," said Director of Operations of Astbury Marsden is Mark Cameron.

Deutsche Bank also an employee bonus plan would suppress by 11% to 3.2 billion euros.

Analysts also said, UBS and Credit Suisse are currently struggling to pay at least 50% of group revenue to employees.

"Banks in Europe are facing a dilemma, regulators, investors, and politicians pressured them to reduce employee salaries and bonuses as happened in the U.S.," says Gosling.

Source:  CNN