One of the UK’s top bankers has welcomed the move by prime minister Rishi Sunak’s government to scrap caps on possible bonuses for staff.
Ana Botín, the boss of Banco Santander (LSE:BNC), told the Financial Times’ Global Banking Summit on Monday that the move would better help align the interests of bankers and shareholders.
Introduced in 2014 when the UK was part of the EU, the rule limiting bonuses to twice the base salary was designed to stop a repeat of the risk-taking that precipitated the financial crisis of 2008-9.
The UK scrapped the cap last month in an attempt to boost the appeal of the City and encourage more banks to keep the bulk of their operations in London after a steady trickle to Paris and other European cities after Brexit.
Botin said Spanish-owned Santander UK would consider changing how it pays staff in London after the scrapping of the cap.
“It’s a business where you should be compensated in a variable way, so I think it’s good news for our industry, it makes a lot of sense,” she said. “I’m sure we will adapt to that.”
Analysts have suggested the cap has increased the cost base of banks as higher salaries have been needed to offset the loss of bonuses.
Investment banks, where bonuses are tied to volatile trading profits, have been hit in particular.