Losses cause cut in bonuses at Sweden’s Carnegie

Bonuses at investment banking group Carnegie are being cut, according to comments attributed to the company’s chief executive Frans Lindelöw.

The bank said in its annual results for the year to 31 December 2011 that it made an operating loss of SEK-31m compared to a SEK76m profit reported a year ago.

The bank pointed to a downturn in its corporate and securities trading activities as key reasons for the change, as group operating income fell to about SEK1.7bn from SEK2.3bn the previous year.

“There is an understanding among the employees that there is a link between bonuses and results. One has to view career and compensation over a longer period,” Lindelöw told Dagens industri.

According to the results, the bank retains a Core Tier 1 ratio of 12.5% – evidence of its ongoing financial strength.

In the results statement, Lindelöw said: “The past year has been characterised by major economic turmoil in the eurozone and the resulting turbulence in financial markets. The situation affected activity among institutional investors and reduced the number of transactions in the M&A and ECM markets.”

“As a consequence, Carnegie’s earnings for 2011 were unsatisfactory. Although we delivered positive contributions on an operational level, we still reported an operating loss if financial expenses and depreciation/amortisation on Group level are included. The Group was also charged with considerable expenses in the form of items affecting comparability, primarily related to the on-going restructuring programme.”

Lindelöw said that 2012 had started on a better note. In the past month the company launched Carnegie Småbolagsfond, a smaller companies equity fund focused on the Stockholm stockmarket. This complements its existing Sweden equity focused funds Carnegie Sverigefond and Carnegie Strategifond.




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