BRITISH CHANCELLOR of the exchequer George Osborne yesterday declared a truce with bankers. The agreement follows months of talks and pledges to increase lending to British businesses and curb bonuses to top executives.
Under the package, the major British banks promised to lend £190 billion in the coming year to business – up 15 per cent on last year. There was a separate commitment to lend £76 billion to small and medium businesses, who complain that they have been starved of borrowings.
Barclays, HSBC, Royal Bank of Scotland and Lloyds Banking Group – the latter two are state-controlled – will now detail the pay packages enjoyed by their seven best-paid executives, five more than previously.
RBS and Lloyds have gone further, releasing the bonuses paid to the companies’ chief executives. Stephen Hester of RBS will be paid £1.2 million this year, along with a £2 million bonus paid in shares and deferred for two years. Lloyds’ Eric Daniels will get a £1.45 million bonus, also in shares and deferred.
Meanwhile, the RBS’s 20,000- strong team of investment bankers will share a £950 million bonus pool this year – down from £1.3 billion a year ago.
Both RBS and Lloyds have agreed that no staff will get cash bonuses of more than £2,000.
The deal, known as Project Merlin, was agreed despite bankers’ fury at Mr Osborne’s decision earlier this week to increase the £2.5 billion bankers’ levy by 50 per cent – a decision seen by some as an effort to strengthen his hand before facing Labour’s new shadow chancellor, Ed Balls in the Commons.
Seeking to draw a line under months of discord, Mr Osborne told the Commons that he had promised the financial industry that it would face no more punitive tax rises.
