Deutsche Bank investment banking bonuses soar 46% after boom year

[FRANKFURT] Deutsche Bank jacked up its investment banking bonus pool by almost half after a blowout year in the markets, a far cry from the lean years when traders called the annual pay announcement the "day of long faces."

A 46 per cent jump in variable compensation for investment bankers, and a 29 per cent increase across all units at Germany's largest lender, compares with smaller gains or even cuts at major European banks that have disclosed the change.

Deutsche Bank posted its first profit last year after five consecutive annual losses, driven by booming income in its trading unit in the wake of the pandemic.

The decision comes as the lender is halfway through a deep restructuring plan and forecasts revenue will fall "marginally" as the pandemic effect peters out. Higher volumes and fees in the corporate and private bank will be offset by rate headwinds, while the asset management unit should see "slightly higher" revenues, it said in its annual report published Friday.

The increase of 413 million euros (S$662.8 million) to Deutsche Bank's bonus pool to about 1.9 billion euros compares with an annual profit attributable to shareholders of 113 million euros. Chief executive officer Christian Sewing's pay rose 46 per cent to 7.4 million euros.

The lender initially planned to raise bonuses by more than a third, but pared its plans after objections from the European Central Bank, Bloomberg News has reported.

Reports on the potential size of Deutsche Bank's bonus pool have angered lower-paid staff, some of whom have been on strike for several weeks asking for a 6 per cent raise.

Meanwhile, cuts at some banks have fomented unhappiness. HSBC chief executive officer Noel Quinn was forced to defend the decrease on calls with investment bankers last week, people familiar with the matter have said. Credit Suisse Group cut its bonus pool by about 7 per cent for 2020. UBS Group increased its payouts by 24 per cent and Barclays raised its pool by 6 per cent.

BLOOMBERG