UK FINANCIAL Investments (UKFI) boss John Kingman yesterday warned the agency was &ldquo;walking a tightrope&rdquo; as it attempted to limit bonus payments while avoiding an exodus of talent at Britain&rsquo;s bailed out banks.<br /><br />The public was &ldquo;understandably angry&rdquo; at fat cat bonus payments, said Kingman, the departing chief executive of the body managing the government&rsquo;s stake in the banks.<br /><br />&ldquo;We have to walk a tightrope in which we reform the cultures of the banks, but we cannot afford to be in a position where the banks lose so many people that we start to lose serious value,&rdquo; he said. <br /><br />His comments came as Stephen Hester, chief executive of Royal Bank of Scotland (RBS), wrote a letter to staff saying the bank would not be paying cash bonuses to employees who earn more than &pound;39,000 until at least 2012. <br /><br />The emphasis on share awards will enable staff&nbsp; &ldquo;to participate in, and benefit from, the recovery of RBS group&rdquo;, Hester wrote. However, there are fears that disgruntled RBS and Lloyds bankers, unhappy at the loss of their cash bonuses, will look to move to competitors. <br /><br />One London-based headhunter told Financial News that he had received more than 150 CVs from RBS staff since news of the break-up broke on Tuesday morning, while another said he was fielding a large number of calls from bankers wanting to quit.<br /><br />Kingman, who is leaving UKFI for a career in the private sector, faced a heated grilling from members of the&nbsp; Treasury select committee yesterday amid accusations that it was &ldquo;business as usual&rdquo; for the banks. He refused to reveal the level of bonus pots at RBS, which is 84 per cent owned by the government, but he said: &ldquo;I think the public has every right to expect us to ensure it is not business as usual.&rdquo;<br /><br />Bonuses at RBS were &ldquo;vastly lower&rdquo; in 2008 than in previous years, but were based on a need to protect the public&rsquo;s investment, he said.<br /><br />&ldquo;We will only sanction what (the banks) are proposing to pay as bonuses if we think it is in taxpayers&rsquo; interest to do that,&rdquo; he said.<br /><br />Kingman said he nevertheless expected banks to meet their lending commitments. &ldquo;If we thought they were not going to, we would get very heavy with them,&rdquo; he said.<br /><br />UKFI had pressed and encouraged banks such as RBS to face up to their losses, but recovery depended ultimately on the economy and it would take time, he added.