Business World

Sunday 23 July 2017

UK banking giants 'in talks to slash bonus pot'

The UK's biggest banks were said today to be in talks about reducing the multi-billion pound staff bonus pot.

Negotiations about cuts to around £7bn of payouts already earmarked for the New Year were being steered by the British Bankers Association, the BBC reported.

One participant told the broadcaster that public anger about the size of the bonus pool could see it slashed to £4bn.

News of the talks follows warnings from both Business Secretary Vince Cable and Deputy Prime Minister Nick Clegg about banks paying big bonuses given the state of the economy.

Institutions could face more taxes if they pay out "outrageously large" sums, Mr Cable said, while Mr Clegg warned ministers would not stand "idly by" if they handed out huge rewards after being bailed out by the taxpayer.

The outgoing head of business group the CBI also said bankers would seem "arrogant and out of touch" if they carried on paying bonuses while the public sector wrestled with swingeing cuts.

A new levy on banks' balance sheets is due to come into force at the start of next year. Ministers hope it will raise more than £8bn over the next four years.

The British Bankers Association said: "It is no secret the major UK banks that operate in Britain and in many other countries have sought for some time to get an international agreement on bonuses.

"Outside the UK, the concern on bonuses is either much more limited or hardly exists at all.

"The way that pay is structured has radically altered following the G20 agreements and the UK now has the toughest regime of all.

"A bonus awarded in the UK has to be against strict targets approved by the FSA, with the majority locked away for a number of years and mostly paid in shares, not cash.

"UK banks are also well aware of the public view and will take this into account when bonuses are decided. Right now, speculation about the size and the issue of bonuses is just that - speculation."

Press Association

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