Deutsche Bank is set to cut its bonus pool by approximately 10 percent. The announcement comes after a torrid year for the biggest bank in Germany. According to some sources who are familiar with the matter, the announcement also comes as the German lender strives to ease cost pressures while trying to retain its key employees.
First reported by Bloomberg, it was revealed that the board of the German bank could also be more selective in its bonus pay in an attempt to keep its highest earners.
In 2017, the German lender dished out approximately €2.2 billion (£2 billion), however, that figure could be set for a double-digit decline after the reporting of a less than impressive results for the third quarter, which saw the revenue in its investment banking division plunge by 15 percent.
The plans to reduce the bonus pool could still be changed if the results of the bank for the fourth quarter markedly improve and the figures will finally be revealed in March. The figures as scheduled to be published this coming February.
A managing partner at Frankfurt-based executive search firm FRED, Tim Zuehlke, stated: “Deutsche Bank has a severe talent loss problem and this bonus cut will exacerbate the problem.”
He added: “Focusing on top performers is not new and not the solution.”
Last year, the share price of the company dropped by more than 50 percent during which it was also dragged into the money-laundering scandal that involved Danske Bank.
The bank said that it processed the payments for Danske Bank but terminated the relationship in 2015 when it recognised “suspicious activity.”
In 2018, shortly after the arrival of Christian Sewing, its chief executive, the bank announced its plans to cut more than 7,000 jobs as part of a restructuring plan that was largely shouldered by its struggling investment banking division.
Last November, it expanded its cost-cutting plan, revising its own target of bringing down expenses to €21 billion by 2021.
A spokesperson for Deutsche Bank refused to release comments regarding the matter.