London bankers enjoyed the largest bonuses in the world last year – but shrinking numbers mean that a select few are getting the biggest pay-packets.
Despite the EU bonus cap and a string of UK banking scandals involving many of Britain´s major banks, City of London bankers received the largest bonuses among the world’s major financial markets last year, according to a new survey.
City of London bonuses increased by 49% last year compared to 2012 to make them the biggest in the world.
They were higher than both Wall Street and Hong Kong, where bonuses rose by 47%, followed by Sidney, where bankers saw an average bonus increase of 45% and in Singapore, where they rose to 42%.
The news undermines industry arguments that the huge payments, which are often made in the face of huge company losses, are necessary to prevent talent leaving London for other, higher-paying rival regions.
More than half of UK finance workers linked their bonus increase to an improved personal performance.
Overall, bankers worldwide had a good year in 2013, with global bonuses 29% higher than in 2012, according to the eFinancialCareers latest Global Bonus Survey.
The poll, which questioned over 2,600 finance professionals worldwide, 700 of which are UK-based, also found that nearly half of UK bankers (41%) said they were not happy with their bonus as it was still beneath their expectations.
James Bennett of eFinancialCareers said the reason for this was due to high bonuses being paid to a small group of workers.
“While the results of the survey may seem surprising, a deeper look into the UK bonus trend finds that banks are dividing their bonus pool more ruthlessly, with a priority placed on rewarding top performers.
“Banks argue that they need to pay large bonuses to keep their top talent. It would appear that a handful have been awarded handsome bonuses while the majority did not necessarily see a huge increase.
“The world’s biggest financial centres all compete for the top talent, and banks will ensure they keep rewarding their best performers.”
Backing this up, personal performance was named as the first reason for a bonus increase by workers in all world’s major financial centres, with more than half of UK finance workers (51%) linking their bonus increase to improved personal performance.
Bonus expectations in Singapore were also unfulfilled as 42% of workers expected more money, as opposed to 33% who said bonuses met their expectations.
The survey comes as Royal Bank of Scotland recently said it would pay their staff bonuses totalling £576million – despite slumping even further into the red with annual losses amounting to a massive £8.2billion.
New rules from Brussels restrict banks to paying bonuses of no more than one year’s annual salary, rising to twice the salary amount if shareholders give their approve.
However, banks have been looking for ways to avoid the cap, which they claim will cause them to lose staff to US and Asian rivals which do not have any pay restrictions.
The UK Treasury has also launched a legal challenge against the pay curbs.