Banks losing staff due to bonus ban
Published 03/06/2010 | 05:00
IRISH banks in London are losing staff to rival firms as they cannot match the bonuses offered in the City, where payouts have returned with a bang.
UK bankers and financiers have received a record £12.6bn (€14.9bn) so far this year, according to the local press, despite ongoing turmoil in the financial markets.
Most recent awards were triggered by bumper profits of early 2007, just before the credit crunch set in, but paid in arrears.
Several staff are said to have left AIB's Capital Markets division, among others, in recent weeks because of restrictions on bonus payments by Irish banks. Anglo targeted 95 people in the UK as part of its redundancy programme, but is understood to have lost more staff looking to jump ship.
Irish banks covered by the Government guarantee scheme have been banned from making bonus payments. Even bonuses that were triggered by certain targets being met have been deferred indefinitely.
However, most other firms do not face any such restrictions and can easily outbid AIB for top talent, and as profits return to the City, so have large bonuses.
A spokesman for the bank, which employs just over 500 people outside Ireland in its Capital Markets division, declined to comment.
Goldman Sachs, Morgan Stanley, JP Morgan and Bank of America-Merrill Lynch have all repaid bail-outs they received through the US government's Troubled Assets Relief Programme at the height of the financial crisis in 2008 and so do not face a government cap of any sort on bonus payments. In February, the British government approved £1.3bn (€1.5bn) in bonus funds for Royal Bank of Scotland, despite the fact that the bank is 84pc owned by the British taxpayer and huge public criticism over the bonus bonanza.
A spokesman for Bank of Ireland yesterday denied that the firm was losing staff in London.
"We see no evidence of that ourselves," he said.
"Our employment levels are stable and have been for sometime."
Bank of Ireland is believed to employ several hundred people in and around London.