Wall Street firms will reduce bonuses rather than cut jobs to control expenses this year, said Betsy Graseck, a Morgan Stanley bank analyst in New York.
Graseck said in an interview on Bloomberg Television’s Surveillance with Tom Keene and Scarlet Fu that compensation (in the form of bonuses) will probably drop from a year ago, as banks attempt to avoid further headcount reductions.
Citigroup Inc. (C) and Credit Suisse Group AG were among lenders that lowered some bonuses by at least 30 percent last year amid a second-half slump in revenue, and firms such as Barclays Plc (BARC) and Morgan Stanley capped cash payments. Revenue from investment banking and trading in the first half of 2012 at the 10 largest investment banks dropped 7.5 percent from the same period in 2011, according to data from industry analytics firm Coalition Ltd.
In the meantime, Bloomberg reports that Nomura is planning to cut as many as 30 jobs in part of its Americas equities division this week amid a global reorganization, according to people briefed on the plan.
The reductions will occur as early as Thursday in execution services, which Tokyo-based Nomura is folding into its independent Instinet unit, said the people, who requested anonymity because the cuts haven’t been announced.
Finally, Reuters reports that big U.S. and European banks are cutting investment banking jobs in the Middle East as the promise of emerging markets is overshadowed by a need to slash costs and a dearth of deal activity.
Institutions including Deutsche Bank, Credit Suisse and Nomura Holdings have all cut jobs in their investment banking teams for the region in recent weeks.