So Much For Banks Not Paying Bonuses To Staff
Staff working at the nationalised bank Northern Rock, are to receive a bonus on their salaries of ten per cent this week, for meeting targets on their Government loan repayment, it has been announced.
Northern Rock was the first of many high street banks to get into financial difficulty at the beginning of the credit crunch and was effectively nationalised back in 2007, when they received a loan from the Government of £27 billion, to keep the lender afloat.
Northern Rock have been set targets by the Government for their loan repayment and it was announced last October that the majority of members of staff would receive a bonus of ten per cent of their salary, if the bank was on target to repay 25 per cent of the original loan by the end of last year, much to the annoyance of UK tax payers and shareholders in the bank, who will receive no dividend payments.
As the bank achieved its target, the bonus payments will be made to staff this week, who will also receive a similar bonus next year if the bank has repaid 75 per cent of its loan and then a further 15 per cent bonus if the loan is totally repaid by the end of 2010.
The bonus payments will apparently not apply to senior management in the firm at this stage, although future bonus payments to these individuals have not yet been completely ruled out by the bank.
Following the announcement of a further Financial bail out for the banking sector from the Government this week, Northern Rock has reversed its decision to reduce its homeowner loan book and encourage borrowers to remortgage elsewhere, in order for the bank to reduce its outstanding loan debts, and will now be returning to the market to try and boost the housing and homeowner loan markets by offering competitive loan products once again.
