Credit Suisse has upset dealmakers in Europe by offering lucrative new retention packages aimed at bankers in the US and Asia.
The Swiss bank is launching a new round of bonuses for key staff to stave off a series of defections as it continues to review its strategy in the wake of a quarterly loss of $1.7 billion in the three months to the end of June.
While Credit Suisse is preparing for a new round of cost-cutting, it is also offering bonuses to some traders and executives in its wealth management unit to keep key staff, according to Bloomberg.
In data accompanying its second-quarter results, Credit Suisse said it spent 207 million francs ($218 million) in the three months to the end of June on “deferred fixed cash compensation” that will be granted over the next three years. However, the awards were only available to “certain employees in Asia and the Americas.”
Meanwhile, since the end of June, the bank has paid 289 million francs to retain key employees in its investment bank, it revealed in its financial report. The awards will be granted over a period of three years.
“It was already selective, which was annoying. But now they are only targeting the markets it wants to grow,” said a London-based trader.
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This is the second time in two years that the bank has offered this type of retention package. Last year, negotiators told Financial News that the selective basis on which they were awarded was causing rifts among other bankers. Now, investment bankers told FN that the European company was being excluded from the latest round of benefits.
Bloomberg reported that a Credit Suisse banker focused on US financial institutions was offered a $10 million package, which would see them paid better than the bank’s CEO.
Credit Suisse has lost around 70 traders since disclosing its links to the collapsed family office, Archegos Capital, which led to a loss of $5.5 billion. However, the bank has been actively recruiting, landing around 60 people in the past year, while offering packages to slow departures.
TO READ Credit Suisse bankers say they want out: ‘More people than ever’ are looking to get out
While rivals have cut wages in their investment banking units so far this year, Credit Suisse increased compensation costs at the unit by 11% to 2.2 billion francs.
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