Royal Bank of Scotland Group Plc, the largest bank owned by the Government of U. K., is slated to be the lender that will be hit the most by yesterday’s deal with the Treasury for restricting the bonuses and encourage lending, according to analysts. At the end, it might be the British taxpayers who will have to bear the whole cost.
RBS has reduced the bonus amount for investment bankers by 27% to less than 950 million pounds ($1.5 billion), according to the lender bank that amounts to below 50% of the 2.2 billion pounds Barclays Plc had kept aside for bonuses by third quarter end.
Further, RBS is going to even restrict the individual cash bonuses to 2,000 pounds. The bank had earlier decided to make a payment of a maximum of 50,000 pounds to keep employees, as reported by a man familiar with the discussions on 20th December.
Cumulatively, the reductions are much higher than at any of the other U. K. banks that come under the agreement with Chancellor of the Exchequer George Osborne. Meanwhile, Barclays as well as HSBC Holdings Plc have agreed to reduce the pay of their British employees in bonuses from last year, though they have not committed to a percentage reduction.