How can banks set aside billions for bonuses?
Detail:
Has the world gone mad? On the one hand is ominous talk about double dip recession, a housing market that is about to crash again and small businesses being unable to get loans from banks, and on the other, banks are expected to announce combined profits of about £11 billion. Billion! Not only that, but they are also apparently setting aside £5bn for bonus payments!
What?!
Lloyds and RBS are banned from paying dividends by the EU because of the £75bn of taxpayer funds they received to stay afloat at the height of the financial crisis, but this restriction does not apply to HSBC, Standard Chartered and Barclays.
Lloyds has reversed a £4bn loss to a £1.6bn profit as its bad debts halved.
HSBC, which is the UK’s biggest bank, is forecast to make profits of around £5.bn. Yet it admitted it had not increased overall lending to firms over the past 12 months, saying demand for credit was weak. It has, however, apparently increased the pay and bonus pool for its workforce by seven per cent to £6.2bn in the first six months of this year.
Needless to say, the profits have triggered a new row over pay, perks and the banks’ inherent failure to lend money.
Yet the British Bankers Association sits high and proud, saying that the banks are “well aware of their responsibility”.
So what is the government doing? Well, it’s launched a commission to study breaking up the big banks and is considering a windfall tax on excessive profits and bonuses. So basically, it’s doing lots of talking at the moment. All of which does not help small businesses that are looking for credit.
The Chancellor has urged the banks over and over again to increase credit to businesses, but he’s just speaking into the wind. The big banks seem to be a law unto themselves, doing what they want, how they want, when they want.
It’s a complete and utter scandal.
What do you think? Have you tried to get credit from your bank and been rejected? We’d like to hear of your experiences with your bank.
What?!
Lloyds and RBS are banned from paying dividends by the EU because of the £75bn of taxpayer funds they received to stay afloat at the height of the financial crisis, but this restriction does not apply to HSBC, Standard Chartered and Barclays.
Lloyds has reversed a £4bn loss to a £1.6bn profit as its bad debts halved.
HSBC, which is the UK’s biggest bank, is forecast to make profits of around £5.bn. Yet it admitted it had not increased overall lending to firms over the past 12 months, saying demand for credit was weak. It has, however, apparently increased the pay and bonus pool for its workforce by seven per cent to £6.2bn in the first six months of this year.
Needless to say, the profits have triggered a new row over pay, perks and the banks’ inherent failure to lend money.
Yet the British Bankers Association sits high and proud, saying that the banks are “well aware of their responsibility”.
So what is the government doing? Well, it’s launched a commission to study breaking up the big banks and is considering a windfall tax on excessive profits and bonuses. So basically, it’s doing lots of talking at the moment. All of which does not help small businesses that are looking for credit.
The Chancellor has urged the banks over and over again to increase credit to businesses, but he’s just speaking into the wind. The big banks seem to be a law unto themselves, doing what they want, how they want, when they want.
It’s a complete and utter scandal.
What do you think? Have you tried to get credit from your bank and been rejected? We’d like to hear of your experiences with your bank.
By:
Sandra
Date/time :
04/08/2010
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