Investment bankers across Europe are braced for cuts of at least 50 per cent in their annual bonuses as Deutsche Bank kicks off the earnings season today.

Banks around the world have slashed compensation after $1,000bn in writedowns of bad loans and toxic assets by the industry, of which about a third has been incurred by European financial institutions. A populist backlash against a wave of multi-billion dollar state bail-outs of banks has added to pressure for cuts, even at companies that have not asked for public money.

“If you’re 50 per cent down, you’ve done OK,” said Nick Harper, a partner at Armstrong International, the London-based headhunter. Senior employees and those working in the complex world of financial derivatives that fuelled bank profits until the global financial crisis struck are expected to suffer the biggest cuts in their bonuses.