ZURICH/LONDON (Reuters) - UBS UBSN.VX is set to raise pay for investment bankers by an average 9 percent to entice staff into staying by lifting salaries to market rates, three sources familiar with the matter told Reuters on Thursday.
The Swiss bank, which is cutting 10,000 jobs as it withdraws from vast parts of fixed income trading, is lifting some base salaries among client-facing investment bankers by as much as 25 percent, while other front-office staff are receiving no pay rise, two of the sources said.
The move doesn’t necessarily mean overall spending will rise at UBS, which is aiming to save 5.4 billion Swiss francs ($5.7 billion) in a three-year overhaul.
However, it does mean that spending on fixed salaries will rise, which fits with an industry-wide shift towards clamping down on bonuses and increasingly base pay. The move doesn’t affect bonus compensation.
UBS’s investment bank swung to a pretax profit of 977 million francs in the first quarter, during which it cut nearly 2,461 jobs bank-wide.
A spokesman for UBS declined to comment.
Earlier this month, the Zurich-based bank said it would listen to activist investor Knight Vinke Asset Management, which called for UBS to split off its investment bank.
Reporting By Katharina Bart in Zurich and Sophie Sassard, Anjuli Davies in London; Editing by Steve Orlofsky