RBS bonuses

Here\’s the bit that people aren\’t concentrating on:

Hester insisted RBS needed to pay bonuses to its investment bankers – who generated £5.7bn of an £8.3bn underlying profit

Yes, the bank as a whole made a loss. But the investment bankers seem to have made a very good profit. The losses came from the previous actions of commercial bankers, not investment bankers.

Paying the people making a good profit well doesn\’t seem, on the face of it, to be a bad business decision really.

In fact, from my limited knowledge of it, RBS\’ problems didn\’t come from its investment bankers at all. A combination of bad loans and hugely overpaying for expansion in taking over ABN Amro were the problems.

Quite why, if investment bankers didn\’t cause the problem investment bankers should get it in the neck I\’m not sure.

6 thoughts on “RBS bonuses”

  1. Companies that make massive losses usually don’t have the money to throw about massive bonuses as well. In such situations, the usual reward is to keep your job while all around you get fired.

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  3. Oh, right. £1.3bn is the lowest they could get away with. And quite a few bankers didn’t even get a bonus. Aww, diddums.

    Wait a sec, isn’t RBS *owned* by the government? Didn’t we just save their asses big time? Oh yeah, we did!

    And I imagine that there’s thousands of hedge funds lining up to get access to all this raw ibank talent, eh? Well, let em go f*cking twist then.

    Oh, sorry, I forgot that ibanking exists purely for the benefit of employees and that shareholders don’t rate a mention. Capitalism at its finest!

  4. I’ve had an even better idea: fire the lot of them and shut down the ibank arm. We the people get to feel good about it (it’s our bank, so WTF), useless capital gets reallocated to something more efficient, the RBS employees get to feel like they’re participating in a real capitalist economy rather than in some state subsidised quasi-communist scam–and to top it off, a bit of churn in the labour market should help to keep inflation down.

    Good times all round, eh wot!

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