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Bloomberg
Credit Suisse Group AG slashed the amount of money set aside for bonuses by hundreds of millions of dollars and used the savings to limit financial hit from the implosion of Archegos Capital Management, Financial Times (FT) reported.
Cuts to bonus pool accruals and other one-off items added about $600 million to underlying profit before tax for the first quarter, which is expected to be just over $3.7 billion, the newspaper said, citing unnamed people familiar with the matter. Bonuses are accrued every quarter on a pro-rata basis, so the bank could set aside more in the remainder of the year to make up for the cuts, the FT said.
Credit Suisse emerged as big loser in global investment banks’ race to exit trading positions as Archegos collapsed, pushing it into a $975 million pretax loss.
and prompting a management shakeup. The bank, which is also dealing with the collapse of a group of supply chain finance funds, has already said that top management won’t get a bonus for last year.
Credit Suisse is scheduled to publish its first-quarter earnings on April 22.