FRANKFURT AM MAIN: Germany’s largest lender Deutsche Bank announced Friday a 29-percent hike in 2020 bonuses despite warnings from the European Central Bank to keep payouts in check while the pandemic pummels the economy.

Deutsche Bank said it paid just under 1.9 billion euros ($2.3 billion) in variable remuneration last year to reward staff after the bank posted its first net profit in six years, at 113 million euros.

The turnaround was powered by a strong performance from the investment banking arm, once the group’s problem child.

Deutsche Bank said in its annual financial report that the higher bonuses were driven by the “significantly improved financial performance” and a need to retain “top talent”.

Bloomberg News and German financial daily Handelsblatt reported earlier that the ECB had pressed Deutsche to lower the planned payouts. Deutsche Bank reportedly initially intended to reward employees to the tune of some two billion euros. In 2019, its bonuses totalled around 1.4 billion euros.

The ECB, which has unleashed massive stimulus to help eurozone banks and the wider economy through the coronavirus upheaval, has urged lenders to show “extreme moderation” in deciding the variable component of bankers’ salaries.

“The reputational impact of the payment of variable remuneration in a global crisis situation should not be underestimated,” ECB chief supervisor Andrea Enria said last year.

The ECB has also urged banks to build up their capital buffers to weather a potential economic storm.

Overall, Deutsche Bank paid just over 10 billion euros in fixed and variable salaries in 2020, a similar level to 2019. The bank said 684 employees took home pay packets of a million euros or more each.

Fixed salary payments fell by 6.0 percent to 7.5 billion euros on “workforce reductions”, it said, but the savings were roughly offset by the higher bonuses. The company shed almost 3,000 full-time jobs in 2020, leaving it with a global workforce of around 85,000.