So, we now have an idea what Credit Suisse CEO Tidjane Thiam meant when he said at Davos that bonuses at the Swiss bank would be okay this year. He meant that Credit Suisse would be paying its investment bankers generously, in Asia.
Bloomberg reports that Credit Suisse is hiking pay for its senior investment bankers in Asia by 15%, that high performing Asian managing directors at the bank are being paid $1m to $1.5m, and that analysts and associates at Credit Suisse in Asia are having their pay increased by 20% on last year.
The claims follow a good year for Credit Suisse’s investment bankers globally while its markets business struggled. Revenues in the bank’s Asian underwriting and advisory business rose 38% in 2016 and profits generated across the Asian investment bank (including from trading) went from CHF33m to CHF353m.
Thiam has championed the Asian market and is keen to generate investment banking revenues from Credit Suisse’s private banking clients. During yesterday’s conference call, he said there are quarters when 60% to 65% of Credit Suisse’s Asian investment banking and capital markets revenues come from its ultra high net worth clients: “…there’s really little competition in that space, and we are really leveraging our market and investment banking capabilities to the max.”
Not everyone at Credit Suisse’s Asia business is likely to be happy with this year’s bonus round, however. The bank is cutting 5,500 additional jobs worldwide this year and reducing Asian costs by CHF300m. Asian investment bankers may be protected, but Asian markets professionals could find themselves squeezed. This is particularly the case if they work in equities, where 2016 revenues fell 30% on the previous year.
Separately, if you want to think clearly, sit up. New research shows that posture affects brain waves. Sitting upright is associated with, “greater high-frequency (i.e., beta and gamma) activity in widespread parieto-occipital cortex.” Slouching or lying down has a more subduing affect.
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