IG's Will Hedden notes that this is turning out to be a disastrous day for RBS:
Don't think we will get far past #RBS numbers but a big day for corporate earnings, bad timing for RBS same day as EU bank bonus role news— Will Hedden (@WillHedden_IG) February 28, 2013
Our reporter James Waterson on the EU decision:
British officials last night lost their battle against EU limits on bankers’ pay, meaning no City banker will be allowed to receive a bonus larger than their annual salary. The proposed rules could be implemented as early as next year. If a majority of a bank’s shareholders vote in favour then bonus ceiling can be raised to double their annual salary.
Mayor of London Boris Johnson was the only major politician to make a public stand for Britain’s financial services industry. Last week he told City A.M. that the EU “should stop butting in” on bankers’ pay and said the reforms could “undermine London’s international competitiveness”.
With banks forced to shift remuneration to fixed salaries, this will lessen flexibility in the financial sector. While capping bonuses is an easy way for politician to engage in mob politics, the implications this ruling has for the UK economy as a whole are grim.
Meanwhile more from RBS chief executive Stephen Hester, who has said that he could see the 316 high street branches that he has agreed to divest being floated separately from the rest of the bank when it is eventually reprivatised. Chancellor George Osborne has expressed that he is pleased that RBS will "accelerate" its focus on the UK. This does follow Hester saying that it might be the right time to think about floating its US operations within two years.