BTG to Plan More Job Cuts, Pay 2015 Bonuses in Two Tranches

  • Bank said to prepare firings in Latin America and in London
  • Annoucements said to be planned to happen on Feb. 22

Grupo BTG Pactual SA, the investment bank that sought rescue financing after the arrest of its founder, is planning to announce more job cuts, this time in London and some Latin America countries excluding Brazil, said people familiar with the matter.

The Sao Paulo-based bank will also reduce bonuses to executives this year and pay them in two tranches: 30 percent in February and 70 percent in November, the people said, asking not to be identified because no public announcement has been made. BTG fired 305 of its 1,653-person workforce in Brazil and made cuts at the New York office on Jan. 28.

The bonuses, based on 2015 results, usually are paid in February. The bank will keep the payment 100 percent in cash, one person said. The announcements of the job cuts and change on the bonus payments may happen on Feb. 22, some of the people said.

Separately, the firm also reduced bonuses to some traders at its hedge fund unit by as much as 80 percent, according to a person familiar with those decisions. The BTG Pactual GEMM Fund, which bets across asset classes based on economic trends, has seen assets drop to about $250 million, the person said, from more than $4 billion in November.

Esteves Arrest

The bank needs to reduce its workforce to remain profitable as Brazil’s economy slows and after the arrest in November of then-Chief Executive Officer and Chairman Andre Esteves in connection with a nationwide corruption scandal. The cuts announced on Jan. 28 were aimed at reducing expenses by 25 percent, Sao Paulo-based BTG said in a statement at the time.

BTG declined to comment. Shares of the company tumbled 48 percent in the past three months, the worst performance among global peers tracked by Bloomberg.

BTG also has been selling assets and secured a credit line from Brazil’s deposit-insurance fund, known as FGC, to shore up cash. Esteves, who was moved to house arrest from jail in December, has denied any wrongdoing through his lawyers. BTG has said it isn’t part of the investigation.

The bank had a total of 5,378 employees as of December, according to its unaudited financial statements.

Keeping Businesses

BTG intends to keep key businesses that are among its most profitable, its new chairman, Persio Arida, said in January at the World Economic Forum in Davos. That includes commodities, asset and wealth management, investment banking, sales and trading, and brokerage operations.

BTG is in talks to sell the Swiss wealth-management business BSI to EFG International AG, a person with knowledge of the matter said in January.

“The situation has stabilized, but we want to be in a very comfortable position as it takes some time to recover the confidence levels counterparties previously had,” Arida said in Davos.

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