London: More than 1,000 investment bankers have quit the Royal Bank of Scotland to join rival firms after the British government ordered the lender to clamp down on bonuses this year, a media report says.
Citing banking sources, the Sunday Times said, "More than 1,000 investment bankers have quit the Royal Bank of Scotland to join rival firms for guaranteed cash bonuses and big salary increases."
Barclays Capital, Nomura and Societe Generale are among the banks that are offering bumper pay deals to RBS bankers, the report said.
Quoting sources the report further said, "A stand-off with the government over payment of bonuses for 2009 threatens to spark a fresh wave of resignations in the new year".
The poaching raids have targeted all parts of the investment bank, including teams in currencies, commodities, fixed income and credit derivatives.
The report further said the staff exodus has gathered pace after the government first ordered it to clamp down on bonuses this year.
In a bid to arrest staff exodus the RBS board wants to boost the bonus pool at the investment bank by at least 50 per cent to about 1.5 billion pound, the report said.
Meanwhile, British Prime Minister Gordon Brown has indicated that RBS will not be discriminated against in the government's bonus crackdown, the report said, adding that treasury sources have suggested that an increase on last year's bonus pool is unlikely.
In the present economic scenario, any bonuses paid out by the RBS is likely to spark a public outcry as many large British companies have enforced pay freezes in a bid to ride out of the recession.
Investment banks, however, are enjoying a boom in profits due to the loss of competition in the sector after the demise of Lehman Brothers and Bear Stearns, and because of trillions of pounds in financial stimulus by governments worldwide.
Threats by regulators to clamp down on bonuses have encouraged banks to raise salaries instead. Barclays Capital last week told some staff to expect double salaries and the rise would be backdated to June.
PTI
First Published: Sunday, December 06, 2009, 17:34