Deutsche Bank has defended its decision to raise its annual bonus payments.
Germany’s biggest lender is to lift its 2017 pot of bonus cash to more than 1 billion euros ($1.2 billion) despite registering a third consecutive year of losses.
Earlier this month Deutsche warned that weak trading and a 1.5 billion euro hit resulting from tax changes in the U.S. would cause the bank to post a “small loss after taxes” in 2017.
Deutche’s corporate spokesperson, Joerg Eigendorf, told CNBC Monday that while the headlines “don’t look good” the bank is in a healthy position and the bonuses are justified.
“As we were on track for a net profit (in 2017) we decided that we shouldn’t punish our staff for a tax reform that has taken place in the United States,” he said.
The 1 billion euro payout figure represents a big drop off from the 2.4 billion euros paid out to employees in 2015.
Shareholders in Deutsche Bank are said to be upset that a strategic turnaround at the bank is yet to yield promised returns. Eigendorf said the company is being transformed but the bank has not been matching U.S. rivals when it comes to staff pay.
“After we hadn’t paid a rival package to most of our senior staff in 2016, we always said that we would pay competitively again in 2017,” he said.
Large bonuses paid to bankers at Deutsche have become a political issue in Germany with the leader of the Social Democratic Party, Martin Schulz, stating the payouts “hurt the solidarity” of the community. A government spokesperson on Monday told reporters that the company management should ask what “impression it leaves in public.”