European investment banks are set to cut their bonus pools in the coming weeks by 20 per cent in a move that will exacerbate the pay gap with their US rivals.

Consultants and bankers estimate banks including Barclays, Credit Suisse and UBS will reduce overall group bonus levels for 2012 by up to 15 per cent but say cuts will be nearer one-fifth in their investment banking arms.

“This is partly driven by headcount reductions as banks scale back investment banking activity,” said Tom Gosling, head of PwC’s reward practice. “But also bank boards in Europe are making a concerted effort to . . . reduce bonuses in response to the reputational issues.”– (Copyright The Financial Times Limited 2013)