Credit Suisse bosses pay cut by 25 per cent
By International Adviser, 12 Feb 15
Directors at the Swiss banking giant Credit Suisse have taken a voluntary 25% pay cut to reflect a $2.6bn (£1.7bn, 2.3bn) fine from the US regulator last year after it helped American citizens evade tax.
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Bonuses across the group were also shed by 9% in the past year in response to the fine and “continued compensation discipline”, its fourth quarter and full year results revealed today.
The Zurich-headquartered bank also said it planned introducing “a number of measures” to counteract the impact of the strengthening Swiss franc and the low interest rate environment on the firm’s profitability.
The results revealed a pre-tax income of CHF3.5bn (£2.5bn, €3.8bn, €3.3bn) which was stable compared to 2013. It also cited a continued dividend of CHF0.70 per share in 2014.
After seeing a loss of CHF370m in the second quarter, income before taxes in the final quarter of the year jumped marginally to CHF1.4bn from CHF1.3bn in the third quarter.
“Our solid results for the fourth quarter demonstrate consistency in our performance amid a challenging market environment with increased volatility,” said chief executive, Brady Dougan.
Although results were hit by lower performance fees and the low interest rate landscape, the group saw pre-tax income rise in its private banking and wealth management division to CHF1bn in the final quarter of 2014 from CHF943m in the third quarter.
Credit Suisse said it had generated net new assets of CHF4.4bn in its wealth management clients, with “strong inflows” from emerging markets, driven particularly by EMEAS and Asia Pacific regions.
Based on 2014 earnings, Dougan estimates the stronger currency will cause a 3% loss of profit which will be offset by the pay cuts by the end of 2017.
Commenting on his outlook on the first quarter of this year, he said: “Our private banking and sales and trading businesses have shown an improving trend in recent weeks.
“Underwriting and advisory activities have started the year more slowly due to market volatility but we have a strong pipeline with execution dependent on market conditions.”
Tags: Credit Suisse | Fine | Switzerland