Cash rewards for executives
Banks ‘paid out millions’ ahead of cash bonus ban
Cash landed in executive accounts in recent weeks
Millions of pounds of bank bonuses were paid out weeks before the Bank of England this week ordered them to halt cash rewards to top executives, it has been claimed.
The ban on cash bonuses was part of the Bank of England’s demand that banks preserve their reserves, including £7.5 billion in dividends, at a critical time for the economy.
However, banking industry sources have told The Guardian that the bulk of cash bonuses will have already landed in executives’ accounts.
More than £500m of cash payouts was earmarked for top executives and these payments are usually paid alongside March pay cheques at banks such as Barclays, HSBC and Standard Chartered.
RBS and Lloyds, which were bailed out in the 2008 financial crisis, limit annual cash bonuses to £2,000 per senior employee.
Business Secretary Alok Sharma demanded the banks do more to help companies after concerns arose that up to a million could fold by being denied emergency loans.
“It would be completely unacceptable if any banks were unfairly refusing funds to good businesses in financial difficulty,” Mr Sharma said.
The government-backed loan scheme aims to ensure companies can access cash as the UK lockdown slows the economy.
“Just as the taxpayer stepped in to help the banks back in 2008, we will work with the banks to do everything they can to repay that favour and support the businesses and people of the United Kingdom in their time of need,” he said.
Bank shares were among the biggest fallers on Wednesday. Lloyds and Barclays fell by almost 12%, while HSBC fell by almost 10% and RBS by more than 5%.