US banks lead the way with bonus increases

 
Tim Wallace
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MOST bankers at US lenders in London have seen their bonuses rise this year, indicating the strength of the recovery in the sector.

New figures from data firm Emolument show 52 per cent have seen their bonuses increase while 10 per cent are steady on the year.

Meanwhile 38 per cent have had a bonus cut this year.

The figures come from the first four banks to give the numbers to staff – Goldman Sachs, JP Morgan, Morgan Stanley and Citigroup.

Some rises were large – 15 per cent of bankers saw their bonuses jump by more than 30 per cent, and another five per cent will get more than 20 per cent more than last year’s pay out.

Others saw substantial falls, with nine per cent taking a bonus cut of more than 30 per cent and seven per cent of bankers taking a cut of between 20 and 30 per cent.

UK banks report their full year results next month and begin to pay bonuses, and the US figures will raise hopes of a strong year for British lenders.

Despite the increases, it is understood that the incoming bonus cap in the EU is starting to affect bankers’ decisions on where to locate.

The cap is particularly important for US banks where it is becoming harder to tempt top talent to move to the City.

“It is becoming a factor in attracting staff,” said an insider at one US institution with a major London presence.

Large firms in the sector, as well as regulators and politicians in the UK, are increasingly concerned about the impact on banks pay and staff.

The cap will limit bonuses to 100 per cent of salary, unless shareholders agree to double it to 200 per cent.

So far much of the impact has been to drive up salaries, reducing the flexibility of banks to cut pay in bad years, and losing the chance to claw back bonuses if performance deteriorates.

More than 300 staff volunteered their bonus data to Emolument.