Terry Murden: Could it be the time to offload RBS shares?

There will be more howls of indignation over bonuses. But we should expect a more conciliatory response from the UK government.

Bankers have been forced into a number of concessions: reducing their bonus pools – the RBS pay-out of £400 million to its investment bankers will be about half of last year’s pot – and making payments in performance-related shares rather than in cash.

Lloyds has also instigated a clawback provision on 13 executives, while senior bankers including Stephen Hester, chief executive of RBS, and Antonio Horta-Osorio, his counterpart at Lloyds, have forfeited last year’s bonus entitlement. As we reveal today, RBS is announcing a freeze on basic pay for 10,000 staff including directors.

Prime Minister David Cameron and the Chancellor, George Osborne, are believed to have decided that, having made their point and scored these victories, it is time to ease off on the banker bashing.

The banks will argue that they’re doing their bit while insisting on the right to reward staff as they think fit or run the risk of losing key staff and seeing the reputation of the financial services industry irreparably damaged. With recruitment firm Hays reporting that bankers are leaving for jobs overseas, it is clear that this is no empty threat.

However, Sir Philip Hampton, the RBS chairman, has admitted that the days of big pay cheques are over. The gravy train may still be in motion but it appears at least to be slowing down.

Hardliners will continue to insist that the bankers still don’t get it and that no-one should be receiving any bonuses at all at the part-nationalised banks, at least until they have paid back their £65.5bn bail-out money, equal to 50p a share at RBS and 61p at Lloyds.

But it will come as little surprise to anyone that the public will have a long wait before the banks’ shares return to break-even, given that they have been under-performing for most of the three years since they were rescued.

One analyst suggested at the weekend that the government should begin selling down its 82 per cent stake in RBS, even at a loss. Manus Costello of Autonomous said that waiting any longer made no sense politically and that even selling at the current price of 27-28p would knock £500m off public sector borrowing costs.

It’s an intriguing idea, though selling a part-stake rather than the whole lot would cut losses while allowing for some upside on the remaining shares. In any case, the stakes would have to be offloaded in tranches to avoid swamping the market and ensuring a healthy demand.

Better still, find a willing investor – almost certainly foreign – to take a chunk of stock at a premium to the current price. It’s almost a given that overseas funds are biding their time in anticipation at picking up bank stocks.

EWM is a rare winner on the high street

FIRST the good news: Edinburgh Woollen Mill is saving the bulk of Peacocks’ 600-plus chain of fashion stores and 6,000 jobs. The bad news is that two-thirds of stores in Scotland will shut, leaving an estimated 400 staff out of work.

Peacocks employed more than 9,000 staff UK-wide and its failure under a mountain of debt was the biggest on the high street since the collapse of Woolworths.

Many of those closing are in areas where retail is already struggling and alternative work is in short supply: Coatbridge, Dumbarton, Saltcoats and other small towns. A large number of those losing their jobs will be women, adding to a growing crisis in female unemployment.

As for those stores saved, EWM’s chairman and chief executive Philip Day is promising to reduce overheads and inject the Langholm company’s ethos.

He’s managed a business that has maintained profits during a sticky period for all retailers and this deal, backed by Barclays and Santander, adds to the Jane Norman acquisition, which suggests EWM is high among the winners in the battle for high street supremacy.