August 3, 2009

Barclays, HSBC, on track for big bonuses

Barclays Chief Executive Officer John Varley said the British bank would be sensitive to public opinion when handing out bonus checks later this year.

In a BBC radio interview, Varley said, the subject of compensation is a hot topic and I understand that.

It is very important that we are sensitive to the views of citizens and indeed central bankers like (Bank of England Gov.) Mervyn King, he said.

Barclays and HSBC each posted multi-billion dollar profits in the second quarter, The Times of London Reported Monday.

Barclays Capital, the bank's investment division, had a net profit of $7.1 billion, putting the unit's 23,000 staff members in line to earn an average of $339,000 in bonus checks at the end of the year, the newspaper said.

How much public uproar will result from the paychecks is hard to say. Neither Barclays nor HSBC accepted taxpayer bailout money to get them through the economic downturn.

Still, John McFall, the chairman of the Treasury Committee of MPs, said bonuses coming back online with a bang so quickly while we are still in recession will just not be understood by the public.

Banks have a social responsibility here and it seems that they are not living up to it, he said.