(9 November 2015 – Switzerland) Switzerland's second largest bank, Credit Suisse, may need to cut bonuses by as much as 60 percent this year due to losses incurred by a write-down, according to reports.
Chief executive Tidjane Thiam wants to substantially write down assets following the acquisition of investment bank Donaldson, Lufkin & Jenrette in 2000. Impairment charges on 6.3 billion francs (A$8.9 billion) in legacy assets could lead to an annual loss of 2.6 billion francs to 2.8 billion francs.
As such, the bank may need to reduce bankers' bonuses by as much as 60 percent, in accordance with rules set by the Swiss Financial Market Supervisory Authority. The supervisor requires financial institutions to cut bonuses in case of financial loss.
Last month, chief financial officer David Mathers said that he expects a substantial impairment charge in the fourth quarter in relation to the company's goodwill. The bank’s Q3 profit results missed analyst expectations as a result of bigger-than-expected drop in private banking and wealth management and loss in the investment bank.
The bank recently announced a plan to restructure its operations and place the investment bank at the service of wealth management. Credit Suisse plans to hold an initial public offering of the Swiss business to raise funds and make acquisitions, while cutting 5,600 jobs across the US, the UK and Switzerland.