JPMorgan leaves bonus pool unchanged since 2014

The world's biggest bank by revenues JPMorgan Chase & Co is keeping its bonus pool unchanged from 2014 for bankers and traders.

Though it is an initial decision taken by the US investment banker, it may change according to the trading performance in next month. The drop in trading revenues is putting more pressure on the US banks.

As a result, several US banks have decided to reduce bonus compensation. European banks are forced to cut down on pay structure.

The latest decision on bonus pool by JPMorgan came at a time when US regulators are about to finalize norms on banker bonuses in the 'near term.' As per initial reports, the initial decision of JPMorgan is subject to the trading performance in December. 

According to Reuters, Goldman Sachs and other US banks have already taken a decision on slashing the bonus compensation from 2014. The reduction in the bonus pool for other US banks is at 16 percent.

The banks were forced to take this decision owing to decline in trading revenues. 

The decision of JPMorgan to keep the bonus pool unchanged is putting more pressure on weaker banks, which are not in a position to sustain the high pay structure.

Jamie Dimon, Chief Executive at JPMorgan, is steering the global banking model while European competitors are slowing down and slashing their expenses and costs. The stringent regulations are making trading less profitable for investment bankers.

The New York-based firm's corporate and investment bank's compensation accounted for 30 percent of the revenues in 2014 and the bank has been able to maintain this ratio for five years, as reported in Bloomberg.

The bank's revenues eased 2.7 percent during the first nine months of 2015 to $26.5 billion. Overall revenues of the company fell two percent during the same period. 

John Cryan, Chief Executive, Deutsche Bank, said that bankers after the 2008 financial crisis paid significantly and he supported the slashing down the bonus payouts. Falling in line, Switzerland's second-largest investment bank Credit Suisse Group AG is also expected to cut the bonus payout up to 60 percent.

According to Forbes, Europe's largest investment bank Deutsche Bank may slash its bonus pool by one-third from the level in 2014. If trading revenues turn weaker during December for JPMorgan, then it'll force the bank to shrink bonus pool as well.  

The bonus payouts are in the UK also shrinking as European banks are forced to cut down on pay structure. The UK's finance sector recorded 10 percent drop in bonus payout amounting to GBP13.6 billion ($20.44 billion).

The fall is over 20 percent when compared with peak level in 2008, according to Britain's Office for National Statistics.

However, the payouts are still higher than eight times of the average of 1,500 pounds across different industrial sectors.