Banks to pay lower bonuses, report claims

7 January 2011

British banks are expected to pay slightly less in bonuses this year, although the total bill for performance-related payouts will still amount to billions of pounds, according to a report.

BBC News has claimed the UK government has accepted that financial institutions will pay out a significant sum, though Royal Bank of Scotland appears set to allocate £1 billion ($1.54 billion) in remuneration as opposed to last year's £1.3 billion.

However, the news provider implied that annual salaries had risen markedly over the course of 2010 in anticipation of a bonus clampdown, with some top traders earning more than 40 per cent more than previous years.

Liberal Democrat leader Nick Clegg warned last month that the coalition would "not stand idly by" while banks made what it considered excessive payments, but financial firms have insisted they cannot risk losing talent to overseas rivals.

However, Conservative mayor Boris Johnson issued a warning over banking payouts in a recent interview with BBC Radio 4, urging the coalition that imposing unwarranted taxes on bonuses could send out the wrong signals to business.

By Gary Cooper

Become a bobsguide member to access the following

1. Unrestricted access to bobsguide
2. Send a proposal request
3. Insights delivered daily to your inbox
4. Career development