Another IB “surprises” on the downside… | FT Alphaville

Another IB “surprises” on the downside…

And so to the harsh news amongst the “key messages” from Credit Suisse, which on Thursday followed both UBS and Deutsche Bank in reporting rather softer Q4 numbers than anyone seemed to be expecting…

Yep, shareholders are being asked to share the pain as this bank adapts to its new environment: the divi was CHF1.30 in 2010.

The immediate share price reaction on Thursday (down circa 3 per cent) was surprisingly muted given that CS has reported a quarterly loss of CHF637m, when analysts were expecting a profit of CHF430m. But hey, this is a “clearing the desks” story, according to CFO David Mathers. Risk-weighted assets have got to come down, costs have got to come down, and the profitability of its private banking business has got to go up… (click to enlarge)

CS might seem to be on-message about banker pay, with incentive awards generally down 41 per cent and total deferred compensation 37 per cent lower, while the executive board itself has taken a 57 per cent cut in total.

That little dotted line box for 2011 gives us a quick up date on the Partner Aset Facility – the scheme whereby senior staff at CS are paid in toxic paper, which may or may not perform in future years. It cost CHF500m to keep the thing running in 2011, with 6,000 employees signed up for that.

Yet the real downward trend in compensation is rather less dramatic. As this little chart from the “supplementary information” section shows, overall compensation and benefits fell just 9 per cent in 2011.