Deutsche Bank bonuses vindicate Credit Suisse traders' moves
The Credit Suisse traders who moved to Deutsche Bank last year must be feeling pretty good. While many Credit Suisse managing directors are reportedly being told they'll receive zero bonuses for 2022, Deutsche Bank traders are reportedly due for slightly more than last year.
Deutsche's ex-CS traders and salespeople include the likes of Johnny Moore, the former head of global credit at Credit Suisse and Diego Discepoli, the ex-head of Credit Suisse's global credit products business, plus a handful of others. Many are likely to have received guaranteed bonuses when they joined Deutsche, but the positive noise around this year's bonuses augurs well for the future.
At Credit Suisse, meanwhile, MDs in sales and trading are not only being (allegedly) zeroed, but if they (or anyone else at CS) do receive a total compensation above $250k, it will come with a catch. - Like last year, the bank is paying a proportion of this year's bonus in cash, and that cash will be clawed back if recipients leave within a three-year period. Worse, and contrary to our previous suggestion, the clawbacks must be repaid including income tax. If you're a UK trader and you receive a £100k bonus, you'll only get £55k of that after tax, but will need to repay the full £100k if you leave a month later; the remaining £45k will need to be reclaimed from HMRC at a later date.
While this might dissuade any further Credit Suisse traders from leaving for Deutsche Bank, some may simply decide to take the hit. If they need additional persuasion, they could always look at the consensus figures for Deutsche Bank's fixed income trading revenues for the next few years. While Credit Suisse's fixed income trading revenues were down 38% year-on-year in the first nine months of 2022, analysts expect Deutsche's trading revenues to rise nearly 30% for the full year. Although they're then expected to fall slight in 2023, the expectation is that they will rise again in '24 and '25.
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