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Swedbank details lucrative incentives on offer to First Securities staff

Swedbank is keeping a tight rein on costs for the majority of its staff for both 2010 and the coming year, but has still earmarked a hefty NOK172m to ensure it’s able to keep hold of key First Securities employees during the integration of its new acquisition.

Swedbank held a majority stake in Norwegian investment bank First Securities for two years before taking full control of the firm in December.

It’s now part of Swedbank’s Large Corporate & Institutions (LC&I) business, which saw a year-on-year profit decrease of nearly 40% to SEK3.4bn in 2010. First Securities also suffered last year, posting a profit of SEK29m (down from SEK64m in 2009) on the back of weaker fixed income trading revenue.

Nonetheless, Swedbank remains determined to retain the expertise it has acquired through First Securities, which gives it greater access to Norway’s capital markets, and has agreed compensation structure amounting to NOK172m. The bank employs 230 people in Oslo, Bergen and Stavanger.

Swedbank says the move was to “retain key staff and incentivise employees to contribute to a successful integration through 2013”.

Whether headcount at First Securities remains constant during that period remains to be seen. Stefan Carlsson, head of LC&I at Swedbank, told us previously: “There will be some rotations of people going on, some people will leave and there will be some key hires too.”

Elsewhere in Swedbank’s business, austerity remains the order of the day. Staff costs amounted to SEK9.3bn, just a 2% rise on 2009. The bonus pool has increased to SEK340m (up from SEK215m in 2009), but a greater proportion of variable cash remuneration is now converted into deferred and restricted stocks. In reality, therefore, remuneration costs are up by just SEK40m year-on-year.

For 2011, Michael Wolf, president and CEO at Swedbank, said: “Expenses excluding variable staff costs are expected to stay stable.”

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