BONUSES HAVE been cut by 27 per cent at Credit Suisse First Boston following a torrid year in which the investment bank slumped Sfr221m (pounds 93m) into the red after taking a hit of nearly Sfr2bn on last autumn's Russian bond market collapse.

Credit Suisse, the bank's Swiss parent, also said yesterday that Dick Thornburgh is to step aside as group chief financial officer in April. His place will be taken by Philip Ryan, currently chief financial officer of Credit Suisse Asset Management, while Mr Thornburgh moves to another role as vice chairman in charge of risk management at CSFB.

Bonuses were cut most steeply in equities and in emerging markets bonds, which suffered most heavily in last autumn's turmoil. These were also the areas which bore the brunt of last year's job cuts.

However, the bank said that payouts were much better on the pure investment banking side, which had a very good year, and in US and European fixed income, which held up strongly.

Lukas Muhlemann, chief executive officer of Credit Suisse Group said that, but for the Russian losses, CSFB would have made profits of Sfr2bn last year.

At group level, however, profits rebounded sharply to Sfr3.1bn post-tax from Sfr601m in 1997, despite the CSFB upset largely as a result of dramatic improvement at the bank's domestic retail operations.

Speaking by video link from New York yesterday, Allen Wheat, CSFB chairman, repeated the invitation to other banks to join in the scheme the bank has proposed for swapping worthless Russian bonds for stakes in Russian oil and gas projects.

While CSFB and its clients have as much of 40 per cent of the total GKO and OFZ bond debt, preliminary indications from the Russian government are that the scheme needs wider backing for it to get serious consideration. "The Russian government's reaction is that if it is something of meaningful size and can be a cohesive group they are very prepared to discuss it," he said. "I hope we can come up with something which suits the creditors and which also suits the Russian economy."

He said CSFB had successfully integrated the former BZW businesses acquired from Barclays Bank the previous year, and had substantially increased investment banking market share.