Morgan Stanley announces bonuses, cuts in equities

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Morgan Stanley is understood to be announcing bonuses to managing directors today, making it one of the first U.S. banks to do so. However, while insiders say there's good news for people working in the U.S. bank's investment banking division (IBD), around 10 people working in the U.S. bank's London equities business are said to have been let go.

Morgan Stanley didn't immediately comment on the layoffs, which are understood to have affected both salespeople and traders in cash equities. In the first three quarters of 2017 equities sales and trading revenues at Morgan Stanley were up nearly 13%. However, salespeople in particular stand to be affected by the implementation of MiFID II, under which conversations with clients who are not paying for research stand to become chargeable.

Morgan Stanley's cuts in European equities follow rumours that J.P. Morgan's U.S equities bonus pool is down 10% for 2017.

However, investment bankers at U.S. banks in Europe are expected to fare well in the coming payouts. The bonus pool for Morgan Stanley's European investment banking division (IBD) is said by senior insiders to be up 8% on last year, while the IBD bonus pool at Citi, which announces next week, is said to be up by close to 9%.

Most U.S. investment banks will announce their bonuses for 2017 this week or next. J.P. Morgan reports its fourth quarter results tomorrow, with Citi reporting next Tuesday, Goldman Sachs and Bank of America reporting next Wednesday and Morgan Stanley reporting next Thursday. European banks typically announce later, starting in late January and continuing into February.

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