The Bankwatch

Tracking the consumer evolution of financial services

Posts Tagged ‘debt to equity

RBS pays out 10% of equity to investment bankers


In the banking business I think we all understand the point and motivational benefit of bonuses, however this story from a Bank that is almost a Government Department (70% government owned) takes insanity to a new level, if you are a taxpayer.

The sheer size of the bonus pool of £4 billion is astounding. That represents just under 10% of the banks equity!

I mention the government ownership because while we are used to investment bankers paying out such bonuses, one would have thought that their government overseers would have insisted on that £4 billion being used to boost capital, or repay Government assistance.

Nice work if you can get it.

Royal Bank of Scotland to give huge bonuses The Times

The average employee in its high-risk investment banking arm is likely to take home £240,000, with the top 20 staff in line for payments of between £1m and £5m.

Relevance to Bankwatch:
On a slightly more serious note, when I predicted the arrival of financial utilities in financial services, I did not expect such a hands off approach from government. Surely it will be a matter of time only.

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Written by Colin Henderson

October 18, 2009 at 02:37

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