It would now appear that UBS is offering guarantees AND paying high salaries

UBS is finally making some money in fixed income. It also seems to be paying its new FICC hires handsomely.

It wasn't long ago that we noted that many of the people being hired by UBS appeared to have been previously unemployed.

Headhunters say there was a reason for this: having hiked its salaries, UBS was allegedly of the opinion that its increased base pay would be sufficient to attract people and there would therefore be no need to offer guaranteed bonuses.

If so, UBS appears to have been mistaken. Now that other banks have increased salaries too, headhunters say the Swiss bank has been obliged to put guarantees back on the table.

The bank declined to comment on its pay policies. However, it's worth nothing that UBS was the first bank to hike salaries substantially. Back when it did so in March 2009, its bonuses were a mere fraction of the norm, and after more than doubling some of its salaries, it may have seemed natural to keep them that way.

UBS CEO Oswald Grubel is also thought to be averse to paying much in the way of guarantees. In August, for example, he declared,"I think, in general, guarantees are a mistake."

Now, however, headhunters allege that UBS is opening its cheque book in a fairly dramatic fashion.

Big hiring, big pay

The bank is rumoured to want to hire as many as 200 fixed income staff in a push to rebuild its FICC revenues. This month's extraction of five people from Deutsche (as yet unconfirmed by the bank) is thought to have come at a cost, with guarantees of at least one year.

This wouldn't be the first time that UBS has offered guaranteed bonuses. When Rajeev Misra (who's leading the FICC build out) joined in May 2009, he was rumoured to have been offered around $6m for one year. Carsten Kengeter received a total of 8m for last year.

However, the return of guarantees would suggest that candidates have become inured to high salaries and that 300k in basic pay is not sufficient inducement to move. Rumour has it that UBS even contemplated hiking salaries further as a result, but decided against it.