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Bonus boomtime as banks announce record profits

Thursday 15th October 2009

A year after the global economy was brought to its knees by reckless lending, US and UK investment banks are preparing to announce huge profits. Investment bankers are about to see a record bonus season as confidence surges in the financial markets.

A record bull run on the US and UK stock markets saw the Dow Jones punch through the psychologically important for investor confidence 10,000 barrier yesterday.

Unemployment figures in Britain showed job losses slowed in the three months to August but still rose by 88,000 to 2.47 million, the lowest rise since July last year. China also reports strong trade figures and oil hit a high for the year.

Goldman Sachs, which employs 5,500 people in London, is expected to report a sharp rise in third-quarter profits today. Analysts estimate that, barring a major setback, the average London worker at Goldman will receive about USD 748,000 (GBP 467,000) in salary and bonuses — 13 per cent higher than 2007 and more than double the 2008 average.

J.P. Morgan Chase, which also has a large London workforce, posted a 72 per cent rise in third-quarter net profits to USD 3.6 billion.

Senior executives from all the major foreign-owned investment banks were summoned to the Treasury yesterday and told that they would not win lucrative government contracts unless they signed up to a code of conduct policed by the Financial Services Authority.

Bank of America, Citigroup, UBS and Nomura, which bought the London arm of the failed bank Lehman Brothers, have agreed to abide by the regime, which is designed to ensure that bonuses are spread over long periods, paid largely in shares and can be clawed back if performance turns out to have been less strong than thought. British banks have already agreed to comply and other countries are close to striking similar deals.

However, The Times reports that banking insiders confirmed that the code is worded in such a way that there is enough wriggle room for all but the most senior to take large parts of their bonuses immediately in cash.

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Added by David Ross on 2009-10-15 03:56:53

Absolutely disgraceful!
Added by Peter Thearle on 2009-10-15 03:02:41

We are all expecting increases in taxes and the general cost of living. Also most of us are unlikely to see an inflation related pay rise for the next couple of years. Yet these lazy, useless, ungrateful parasites are expecting bonuses and pay rises, when it is the normal everyday taxpayer that has kept them in a job and enabled their companies to stay afloat. Also, on top of that they still steal ridiculous amounts of money from us in 'bank charges' to boost their profits. Sack the lot of them, they are why the country is in a mess.
Added by ROB TONER on 2009-10-15 02:45:51

Are these banks paying back the tax payers the millions/billions before taking bonuses. If not why not. My understanding was that the bail out to the bamks was in the form loans not gifts allowing the greedy to accumulate even more wealth.
Rob Toner.
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