British banks set to hand out hundreds of millions in staff bonuses
Britain’s largest banks are finalising plans to hand out hundreds of millions of pounds in staff bonuses next week, at the same time loan losses are expected to catapult during the pandemic.
Taxpayer-backed lender Natwest Group has informed the Treasury that it is poised to distribute more than £200m in staff bonuses for 2020.
The sum marks a significant drop from last year’s bonuses, when £304m was handed out to Natwest staff.
It is understood the group will also maintain a £2,000 cap on cash handouts which has been in place since the financial crisis.
Natwest declined to comment.
Meanwhile, Barclays is preparing to award chief executive Jes Staley an annual bonus of several hundred thousands of pounds.
Staley’s payout will be finalised by Barclays’ remuneration committee next week, but will likely be in the region of £500,000 to £800,000, on top of his £2.3m in annual fixed pay, according to Sky News.
Staley announced in October he will stay at the bank for another two years, after steering Barclays to beat expectations during one of the most difficult quarters in the UK’s financial history.
Between July and September, Barclays reported income of £5.2bn and profit before tax of £1.1bn — almost double the average of analysts’ forecasts.
Barclays did not respond to requests for comment.
Lloyds Banking Group, the UK’s largest high street lender, is currently the only British bank that will refrain from handing out bonuses during the coronavirus crisis.
The bank announced in December it would axe staff bonuses for the year after profits plunged during the pandemic.
In October the bank announced it had rewarded its junior employees with a one-time cash reward of £250, while it considered offering its employees “recognition shares”.
The bank returned to profit in the third quarter reporting a pre-tax profit of £1bn, well ahead of the average £588m forecasted by analysts.
But the recovery did little to offset caution for the bank, with Lloyds in November announcing plans to axe over 1,000 jobs as part of cost-cutting measures.
The Prudential Regulation Authority has urged lenders to use “a high degree of caution and prudence” in handing out cash bonuses to employees during the pandemic.
Last year, the UK’s largest banks cancelled dividends worth more than £7bn in total amid pressure from the Bank of England to scale back payouts during the coronavirus crisis.