Konstantinos Pouliakas: Decision to defer is a sensible one that customers will appreciate

Published on Friday 25 February 2011 17:03

The decision by the Lloyds chief executive to defer the payment is certainly a sensible one, especially when we consider that the bank is partly funded by taxpayers' money.

It's only two years since the bank collapsed, so it's arguably too early to be looking at paying big bonuses now.

The Lloyds decision does seems to be responsible and one that a lot of people will appreciate.

But at the same time the decision of the RBS chief executive does seem to be provocative, particularly when the bank has made a loss for 2010.

Some people would certainly say that there's a case for RBS's chief executive taking the same approach as Lloyds at a time when the banking sector is still very fragile.

It would certainly seem to be a very sensible thing to do and many of the bank's customers would welcome that approach.

One important point to raise is that it doesn't seem to be the case that all bank bonuses are linked to improved performances or to profitability.

It's hard to say why RBS has opted to go down a different route to that of Lloyds, but there could well be more criticism to come of the decision to accept the bonus.

It really is a very sensitive issue at a time when so many people are under financial pressure.

There will be some people who are quite annoyed by this news and it could provoke a bit of a reaction against bankers during a time when the sector is still trying to recover.

l Dr Konstantinos Pouliakas is a research fellow at Aberdeen University's Business School