Banker bonuses
February 6, 2010
Deutsche Bank - Germany's largest bank - was the first institution to reveal what it expects to pay in the UK "supertax" on bonuses. Ackermann said the bank will spread the tax burden across its global operations to avoid the bank's key operations in London being "destroyed" if its 8,000 staff there were not adequately compensated.
"We are in a very sensitive situation right now and want to find the right optimization," Ackermann said in a conference call with analysts. "We could not pay no bonus without jeopardizing the franchise."
The 50 percent tax covers all bonus payments above the first 25,000 pounds ($40,000). Deutsche Bank's payment is an indication that the tax could raise some 2 billion pounds to fill Britain's coffers, based on estimates from analysts of some 75,000 people working in London's investment banking sector.
Pay to decrease, Deutsche boss says
During the conference call, Ackermann also said that he expects bankers' pay levels to decrease in years to come as banks lower the amount of bonus payments for their staff.
"I cannot imagine that we will pay the same compensation level going forward if the other things are changing so drastically," Ackermann said, citing the regulatory overhaul expected in the global financial industry.
"The more we see capital, the more we see incremental taxation, the more likely and the more necessary it is, also for the benefit of shareholders, that we do something on the compensation level," he said.
He said that Deutsche Bank is increasing employees' fixed pay by 5 percent to 30 percent, in turn reducing bonus payments by an equal amount. The bank may also claw back bonus payments in the event of losses.
2009 results posted
Alongside news of the UK bonus tax, Deutsche Bank also reported a rebound in the final quarter of 2009, with an annual net profit of 5 billion euros following a loss of 3.9 billion euros in 2008.
In the final three months of last year, Deutsche Bank turned in profits of 1.3 billion euros, a statement said. The results were bolstered by a tax benefit of 554 million euros. Analysts also reported concerns about a fall-off in earnings at the investment banking division in the final part of the year.
In 2010, the bank aims to boost its presence in key emerging economies in Asia, Central and Eastern Europe, as well as the Middle East.
"In our business in Asia, we intend to become one of the top three investment banks," Ackermann said.
dc/dpa/afp
Editor:Toma Tasovac