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Banks face bonus deadline - report

Source: Reuters - Mon 26th Oct 2009

Britain's banks, which have seen the profits roll in as the economy rebounds must give breakdowns of bonuses by the end of the week, or they will need to use the cash to beef up reserves, says The Sunday Times.

Banks must provide a detailed breakdown of how bonuses will be split between cash, shares and other forms of payment, the paper says, quoting Lord Turner, head of the banking regulator.

Financial sector bonuses are set to jump by 50 percent in 2009, the Centre for Economics and Business Research estimates, yet many banks are still being propped up by the taxpayer with the country's largest retail bank, Lloyds Banking Group, still 43 percent owned by the government.

Turner, chairman of the Financial Services Authority, said that banks, which have seen bumper profits because of the financial rebound, should use spare cash to build up reserves rather than pay out generous bonuses.

"The major trading banks we know are making large profits for exceptional post-crisis reasons... we believe we are in a position to achieve capital enhancement without adverse consequences," he said.

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