Deutsche Bank to hike bonuses to more than 1 billion euros for 2017: FAS


FRANKFURT (Reuters) – Deutsche Bank (DBKGn.DE) will hike annual bonus payments to more than 1 billion euros ($1.2 billion) despite posting its third consecutive annual loss in 2017, a German newspaper reported. The move comes amid concern another year of low bonuses could prompt investment bankers to defect to more generous competitors, German weekly Frankfurter Allgemeine Sonntagszeitung said on Saturday, citing unidentified sources. Deutsche Bank declined to comment on the report. A source had told Reuters in October that Deutsche Bank, which is struggling to keep pace with Wall Street firms, would pay higher bonuses in 2017 but that the exact level would depend on how its investment bank fared through the end of the year as well as on what its competitors pay. A return to bigger bonuses would be a relief for bankers at Deutsche Bank, where total bonus payments dropped from 2.4 billion euros in 2015 to around 500 million euros in 2016 after a multi-billion dollar legal fine for the sale of toxic debt. But Deutsche Bank has to tread carefully on payout levels because credit rating agencies are keeping close tabs on them and shareholders are frustrated by its slow turnaround. The bank warned this month that weak trading, low client activity and a 1.5 billion euro hit from a tax overhaul in the United States would result in a “small” 2017 loss. Germany’s biggest bank announced an overhaul in March last year that included integrating its Postbank retail bank with its in-house consumer bank in an effort to cut costs, as well as the partial sale of its asset management business. Frankfurt Allgemeine reported on Saturday that Deutsche Bank aimed to float the asset management business, which could achieve a total valuation of around 8 billion euros, in March at the latest. ($1 = 0.8052 euros) Reporting by Maria Sheahan; Additional reporting by Tom Sims; Editing by Mark PotterOur Standards:The Thomson Reuters Trust Principles.
Source: Reuters