UBS bonus pool surges 14pc as Euro­pean ri­vals cut awards

The Pak Banker - - FRONT PAGE -

LON­DON: UBS Group AG, which cut its se­cu­ri­ties unit to fo­cus on wealth man­age­ment, raised its bonus pool by 14 per­cent in 2015, leav­ing it the only ma­jor Euro­pean len­der to award bankers with higher com­pen­sa­tion.

The bonus pool swelled to 3.5 bil­lion francs ($3.6 bil­lion) from 3.06 bil­lion francs, the Zurich-based bank said in its an­nual re­port on Fri­day. Chief Ex­ec­u­tive Of­fi­cer Ser­gio Er­motti, 55, re­mained the high­est paid mem­ber on the group ex­ec­u­tive board, with a to­tal com­pen­sa­tion of 14.3 mil­lion francs, up 28 per­cent from 2014. His bonus jumped 37 per­cent to 11.5 mil­lion francs. UBS's dis­clo­sure comes af­ter lenders across Europe slashed their bonus pools, with Deutsche Bank AG and Credit Suisse Group AG cut­ting vari­able pay by 11 per­cent. While some of Europe's largest lenders posted losses in 2015, hurt by a slump in trad­ing rev­enue and costs tied to re­struc­tur­ing plans, UBS posted the strong­est profit since 2010.

"It's eas­ier to keep pay­ing high per­form­ers well if you can af­ford to in­crease the bonus pool," said An­dreas Ven­ditti, an an­a­lyst at Von­to­bel. "When a bank is cut­ting, em­ploy­ees who aren't vi­tal to the suc­cess of the busi­ness, have to take an even larger hit." Deutsche Bank, which houses Europe's largest in­vest­ment bank, said ear­lier this month that it cut its bonus pool to 2.41 bil­lion euros ($2.7 bil­lion) af­ter post­ing its first an­nual loss since 2008. The len­der's co-CEO John Cryan, who scrapped div­i­dends and an­nounced plans to elim­i­nate thou­sands of jobs, on Wed­nes­day fore­cast an­other un­prof­itable year.

At Bar­clays Plc, to­tal com­pen­sa­tion costs de­creased 6 per­cent to 8.3 bil­lion pounds ($12 bil­lion) in 2015, while the bonus pool dropped 10 per­cent. The Lon­don-based bank's se­cu­ri­ties busi­ness swung to its first quar­terly loss in at least two years in the three months through De­cem­ber, as CEO Jes Sta­ley seeks to shrink the unit and boost prof­itabil­ity.

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