Banks to Cut Pay Instead of Jobs, Graseck Says: Tom Keene
Compensation will probably drop from a year ago as banks attempt to avoid further headcount reductions, Graseck said today in an interview on Bloomberg Television’s “Surveillance” with Tom Keene and Scarlet Fu. Cuts will come from bonuses rather than base salaries, Graseck said.
Citigroup Inc. (C) and Credit Suisse Group AG were among lenders that lowered some bonuses by at least 30 percent last year amid a second-half slump in revenue, and firms such as Barclays Plc (BARC) and Morgan Stanley capped cash payments. Revenue from investment banking and trading in the first half of 2012 at the 10 largest investment banks dropped 7.5 percent from the same period in 2011, according to data from industry analytics firm Coalition Ltd.
Royal Bank of Scotland Group Plc, Britain’s biggest government-owned lender, said this week it will cut 300 more jobs at its investment-banking unit, bringing the total to 3,800. Citigroup, the third-largest U.S. bank by assets, said earlier this year it’s cutting 5,000 positions, and a person with knowledge of the matter said in July that the company plans to eliminate about 350 from the securities division.
Banks are also advertising fewer openings amid the cuts. Job postings for the sector dropped 21 percent to 7,540 in September from a year earlier, according to Bloomberg Industries.
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