Jump to
Goldman Sachs has become the first bank to remove its cap on UK banker bonuses in the wake of last year’s rule change by the Bank of England, with HSBC expected to follow suit at its annual general meeting today.
The move, expected to be replicated by other UK lenders, comes after the BoE scrapped the bonus limit of two times an employee’s base salary imposed by the EU in 2014, as part of the government’s efforts to boost the competitiveness of the City of London after Brexit.
“We are a global firm and to the extent possible we adopt a consistent global approach across everything we do,” said Richard Gnodde, chief executive of Goldman’s international subsidiary, in a video message to staff, the Financial Times reported.
“The bonus cap rules were an important factor preventing us from being consistent in the area of compensation.”
—
Société Générale reported better-than-expected first quarter results on Wednesday, with weakness in its fixed-income and currencies divisions offset by the strong performance of its equity derivatives business.
The bank — France’s third largest by assets — reported a 22 per cent year-on-year drop in net income to €680mn, ahead of an average of €463mn from 15 analyst estimates polled by the bank. Revenues slipped 0.4 per cent to €6.6bn, ahead of an average estimate of €6.5bn.
Fixed-income and currency trading revenues fell by 17 per cent year on year, while equities trading revenue grew by 3 per cent.
The bank confirmed the departure this week of two Hong Kong-based staff after “a one-off trading incident in 2023”. One of the two, former trader Kavish Kataria, on Thursday hit out at the bank, saying he had been made a scapegoat and that “the entire risk team and other bosses” were equally responsible.
—
Coutts is to pull £2bn of investment away from UK equities, in a blow to government plans to support London’s flagging capital markets.
In a note to clients this week, Coutts — the NatWest-owned private bank used by the British royal family — described its current portfolio balance as “something of an anachronism”, signalling a more global approach with a greater emphasis on US shares.
London has raised £300mn from initial public offerings in the first quarter of the year, less than half that raised in mainland Europe during the same period, with large domestic firms shunning the City in favour of alternative locations.
UK chancellor Jeremy Hunt last month announced plans for a “British Isa”, offering investors more generous tax incentives if they invest in UK shares.
—
UBS is mooting plans to slash costs at its asset management business and whether to fold parts of the division into its larger wealth management activities.
A person with knowledge of the discussions told Reuters that the bank — Switzerland’s largest — aims to cut at least $300mn in costs at the business, including by reducing Switzerland-based back-office staff who joined with Credit Suisse.
UBS acquired Credit Suisse last year in a rescue bid orchestrated by the Swiss government.
The bank’s asset management division contributed less than 7 per cent to the bank’s total revenues in 2023, and is dwarfed by the bank’s wealth management division, which makes more than half of the group’s total revenues, Reuters reported.
—
One of Canada’s financial watchdogs has levied a fine of approximately $9mn against Toronto-Dominion Bank.
In a statement, the Financial Transactions and Reports Analysis Centre of Canada stated that TD Bank failed to submit suspicious transaction reports, despite reasonable grounds to suspect that the transactions were linked to money laundering or terrorist financing activities.
Fintrac clarified that the fine was imposed for administrative violations, with no allegations of criminal offences.
The penalty comes in the wake of TD Bank’s recent disclosure of setting aside $450mn for an ongoing US regulatory probe into its anti-money laundering controls. Analysts suggest potential fines in the US could reach $1bn.
Additional reporting by Simon Duffy
