British bankers will start collecting the biggest bonuses since before the 2008 global financial crisis.
As most Britons face the biggest squeeze on their incomes since at least 1990, already very highly paid bankers are celebrating “particularly obscene” bonuses.
London’s mergers and acquisitions (M&A) bankers earned total fees of $3.5bn (£2.6bn) in 2021.
London’s big four banks – HSBC, Barclays, Lloyds Banking Group and NatWest – are expected to pay out bonuses totalling more than £4bn when they report their annual results in the next fortnight.
Combined, the banks’ annual profits are expected to exceed £34bn – the most since 2007 in the boom before the financial crisis.
The bumper bonuses will tip several hundred more UK bankers into the EU’s “high earners” warning report which details every banker earning more than €1m (£835,000) a year. The European Banking Authority (EBA) found that 3,519 bankers working in the UK earned more than €1m-a-year last year – more than seven times as many as those working in Germany which has the second-highest number of €1m-a-year bankers.
The EBA figures show 27 UK bankers earned more than €10m in 2019 (the latest year available). Two UK-based asset managers were paid between €38m and €39m, and one merchant banker was paid €64.8m. That banker received fixed pay of €242,000, topped up with a bonus of €64.6m.
Figures released on Tuesday by the Office for National Statistics (ONS) showed that average pay in the public sector rose by 2.6% between October and December 2021, while those working in business and finance saw their pay grow by 8.1% due to “an increase in bonus payments”.
Gary Smith, general secretary of the GMB union, which represents 600,000 mostly frontline workers, said: “These sky-high banker bonuses are a kick in the teeth for everyone suffering with the cost of living crisis. I hope Andrew Bailey tells his banking mates to show the same ‘restraint’ he so readily demands from underpaid workers in the rest of the economy. Essential workers, like our nation’s carers, often earn pennies above the minimum wage,” Smith said. “Mr Bailey should step out of his banking bubble and shadow these workers to see the people who actually deserve a proper pay rise.”
Frances O’Grady, the general secretary of trade union body the TUC, said the huge increase in bankers’ pay was “an insult to working families across Britain”.
“While millions struggle with the cost of living, executive bankers are set to receive yet another cash windfall,” she said. “At a time when workers are being told not to ask for a decent pay rise, no such restraint is being asked of the City. We should be holding down bonuses, not ordinary people’s wages.”
Luke Hildyard, the director of the High Pay Centre, which campaigns for executive pay restraint, said: “Decades of economic deference to the super rich have brought us to a point where bankers are raking in historic pay awards while the rest of the country is crippled by rising prices and wage stagnation..."
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