Bankers at Goldman Sachs are expecting mammoth bonuses, after the investment banking division booked profits of more than £500m in the first quarter, nearly half of the £1.2bn it made for the whole of 2008.
Rivals have also enjoyed a lucrative start to 2009, with Barclays Capital’s first quarter profits up 361 per cent to £968m and Deutsche Bank’s investment bankers moving £54.8m into the black for the first quarter, after losing £6.2bn last year.
Henk Potts of Barclays Capital, said the industry was “booming”.
“Fixed income, commodities and currency are all doing fantastic volumes. Margins are very wide so there’s a tremendous amount of opportunity,” he said.
Andrew Evans, managing director of recruiter Morgan McKinley, also pointed to a gradual increase in the number of loyalty awards.
“Retention bonuses have crept back into the recruitment vocabulary recently,” he said.
Signs of a bonus bonanza came as it emerged that Royal Bank of Scotland chief executive Stephen Hester will net up to £9.6m for his efforts to revive the bank.
UK Financial Investments (UKFI) -– which manages the government’s 70 per cent stake in RBS – is understood to have met other shareholders to approve the deal last week.
Hester will earn a basic salary of £1.2m, around £2m in annual non-cash bonus awards and nearly £6.4m in share options.
Hester’s deal will depend on the bank’s share price moving above 70p, a level at which the government would make £8bn if it were to sell its stake.