Britain’s banks prepare to pay out bumper bonuses amid cost of living crisis
Britain’s banks are bracing themselves for a public backlash as they prepare to dish out more than £4bn in bonuses while customers grapple with a growing cost of living crisis.
Britain’s big four lenders NatWest, Barclays, HSBC and Lloyds Banking Group are expected to reveal bumper combined profits of £34bn after riding the wave of an economic recovery in the past year, The Times reported.
Transaction fees have soared at the banks amid a dealmaking frenzy and provisions for bad loans have been cut back since the worst of the pandemic subsided.
The banks are now expected to ramp up payouts for staff after paring back bonuses in 2020, while dividend payouts to investors are also back on the rise after the government ordered the banks to cut them entirely for periods of the pandemic.
The plans have already sparked calls for a windfall tax on the banks. Lord Sikka, a Labour Peers, told The TImes: “We need a windfall tax on banks to help everyone else because they are one of the organisations who during the pandemic continued to trade and did incredibly well.”
Luke Hildyard, director of the High Pay Centre, told The Times, that huge payouts for bankers amid a mounting cost of living criss would be received badly by the public.
He told The Times: “The synergy of huge payouts for senior bankers and the cost-of-living crisis experienced by the wider public highlights the miserable results of the UK’s longer-term approach to economic policymaking, which could be characterised as bending over backwards for the super-rich and waiting in vain for them to bestow prosperity on the rest of us.”
NatWest will be the first of the big lenders to reveal results on Friday, with city analysts expecting it to post profits of £4bn.
The bank is expected to dish out bonuses of nearly £300m, The Mail on Sunday reported, after cutting payout by 30 per cent last year.
Barclays is expected to reveal £8.1bn in profits with around £3bn in bonuses, up from £1.58bn last year.
HSBC and Lloyd’s are also both expected to reveal increased payouts following strong performance in the past year.