BNP cuts payouts as Europe's banks suffer bonus ire

LONDON/PARIS (Reuters) - France's BNP Paribas BNPP.PA slashed 2008 bonuses for its investment bankers by 70 percent, following similar cuts by European rivals as public anger mounts over bankers' role in the credit crisis.

BNP’s corporate and investment bank (CIB) on Thursday reported a 2.07 billion euro (1.8 billion pound) pretax loss for the October-December period and a 1.19 billion euro loss for the full year.

That was part of a 1.97 billion euro pretax quarterly loss at the group, or a 1.37 billion euro net loss.

“Bonuses overall in CIB have gone down by 70 percent from 2007 to 2008,” BNP Paribas Chief Executive Baudouin Prot told reporters at the bank’s results conference.

Politicians, shareholders and taxpayers across Europe have called on banks to cut bonuses for the disastrous 2008, especially at those banks that have taken government help to survive the financial crisis, including BNP, Royal Bank of Scotland RBS.L and UBS UBSN.VX.

UBS said it will reduce 2008 bonuses at its investment bank by more than 80 percent. Barclays BARC.L, which has raised funds privately, said it would more than halve 2008 payouts at its investment bank arm.


Equity and advisory businesses at CIB were hit hard in the fourth quarter, but fixed income held up well and the financing units posted record revenues.

Analysts said there was good cost control in CIB, aided by the bonus cut. BNP said it aimed to shave another 5 percent off CIB costs -- excluding bonuses -- in 2009.

The bank said in December it could cut 700 jobs at CIB, or 5 percent of the division’s staff, as part of a restructuring that would also reduce its market risk and bonds inventories.

CIB performed well in January, the bank said.

“The corporate and investment banking unit should return to profitability in 2009, writedowns on risky assets should decline,” WestLB analyst Christoph Bossmann said in a note.

BNP said on Wednesday the heads of its asset management and CIB businesses would swap jobs to give them “a fresh eye” on the businesses.

Below are 2008 bonus cuts at European banks:

* Barclays: a 48 percent fall across the bank and a drop of more than 50 percent at the investment banking arm.

* BNP Paribas: a 70 percent reduction at the corporate and investment bank.

* Credit Suisse CSGN.VX: an average decrease of 60 percent, with managing directors getting no unrestricted cash.

* RBS: a 90 percent reduction in cash bonuses. But media reports said the total bonus pool may still top 1 billion pounds with deferred payments, resulting in only a 60 percent drop.

* UBS: a drop of more than 80 percent for its investment bank.

Editing by David Cowell