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UBS bonuses casting a pall over Deutsche Bank and Barclays

As bankers and traders at major European banks wait to find out their bonuses, they need to hope that the senior people determining the size of their bonus pools haven't paid too much attention to the banks that went before. Unfortunately, this is probably wishful thinking.

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"The European banks are busy managing expectations down," says one London fixed income headhunter. "The general expectation is a decline of 10-15% even for top performers. It's dour."

Barclays announces its bonuses around February 20th. Deutsche Bank and BNP Paribas announce in early March. If you're a fixed income trader, none are looking good. At Barclays, there are suggestions that the bank will zero moderate performers after making a lot of new hires on guaranteed bonuses. At Deutsche Bank spending on pay per head in the investment bank was stagnant last year and insiders say the moody is gloomy. At BNP Paribas, a bad final quarter in fixed income trading undid the good that came before.  

Unlike the US banks, the Europeans have the luxury of benchmarking themselves to the banks that announced their bonuses first. They look to the US banks, which announced in January and where bonuses for 2023 were largely disappointing (with the possible exceptions of Goldman and JPMorgan). They also look to UBS, which announced two weeks ago, and does not appear to have paid well at all. 

"Citi, Morgan Stanley and UBS are the places where people seem particularly disappointed," says one fixed income headhunter. UBS declined to comment, but sources say it doesn't help that some of the Credit Suisse people who've joined their rescuer received retention packages. "There's a bit of disquiet there," the headhunter adds. 

As bankers and traders wait to find their fates, the hope seems to be that senior people will be squeezed and that juniors and mid-ranking people will be protected. One Barclays VP said the rumour is that non-profit generating directors and managing directors will get the zeroes: "VPs are usually protected," he says. 

At Deutsche Bank, queries are being raised about the pay for the many Credit Suisse traders who joined in 2022 and 2023. Deutsche declined to comment on compensation, but there are rumours of performance targets that haven't been met and "verbally guided" bonus numbers that are probably irrelevant in the circumstances. 

Some of those fielding calls from disgruntled bonus recipients say it's not that bad. UBS bonuses were down a lot, but only in relation to the strong year of 2022. People are complaining about their pay, but they're a self-selected group of whingers. "The people we speak to are by definition the ones who've been paid down," says another headhunter. "And hiring managers will always tell people that they're down 10% while the overall bonus pool is down 25%, just to make them feel better. That doesn't mean it's true."  

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AUTHORSarah Butcher Global Editor

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