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UBS cut its bonus pool by 17 per cent to SFr 2.9bn last year as continental Europe’s banks weathered difficult trading conditions, according to the Swiss bank’s annual report.

The drop in performance awards to UBS bankers, revealed on Friday, was not as severe as the 80 per cent fall expected a German rival Deutsche Bank, which is having to shore up its financial position in the wake of heavy fines. But it was a significant reversal compared with 2015, when UBS bucked the trend in the sector and increased the bonus pool by 14 per cent.

Sergio Ermotti, chief executive, also saw his compensation fall in 2016. He received a total of SFr 13.7m last year in fixed and variable pay, down from SFr 14.3m in the previous year.

UBS has performed better than rivals recently, following strategy revamp in 2012 which reduced the size of its investment bank and increased the focus on managing the wealth of the world’s rich. But turbulent financial markets last year paralysed client activity while low interest rates further eroded earnings. UBS’s adjusted profits before tax fell 5 per cent in 2016 to SFr 5.3bn.

The 2016 bonus pool was shared by 47,603 bankers, up from 46,311 in 2015.

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