Banks Scoop Income From Bankers Bonuses
Wednesday, 18 August 2010
International banks are cashing in on the back of their staff bonuses according to foreign exchange specialist, Currency UK.
The company has seen a dramatic rise in bankers using its service to transfer bonuses, which have been paid in US Dollars, back into Sterling.
Their employers have been charging British staff fees of up to £2,500 just to transfer their bonuses into pounds. Adrian Jacob from Currency UK explains: "International banks pay their staff bonuses in US Dollars. They are then charging UK-based staff fees of between one and three per cent to transfer this cash back into Sterling which is astronomical.
"We undertook one recent transaction for a banker who had received a $250,000 bonus. The international bank she worked for had quoted a charge of one per cent to transfer the sum into pounds.
"Currency UK was able to offer a far better exchange rate, coupled with no fees, saving the banker in question £1,400. This seems to be a clear case of the banks cashing in on their own staff."
Although tough new rules restricting bankers' bonuses were approved by European Union lawmakers last month, it will be winter's pay season before this takes effect.
Millions of pounds in bonuses are therefore being paid out ahead of that deadline, with many being paid in US Dollars, and city professionals are naturally keen to retain as much of the cash for themselves rather than giving it back to their employer or other banks.
Currency UK has previously warned small companies trading overseas that they are losing billions on bank foreign exchange transactions; as well as levying a fee for each transaction. Banks also set their exchange rate only twice a day rather than in real time.
Now they are making the same warnings to some high-earning individuals.
Mr Jacob says: "The warning we have given to SMEs also applies to individuals who need to transfer funds from one currency to another: Shop around.
"The level of trust put in banks has definitely waned in recent years, but until now, small companies and individuals have had no choice but to use them.
"Now, however, many small businesses and individuals can use specialist companies, such as Currency UK, to access tools which have only been available to larger companies trading in high levels of foreign exchange - and in doing so save up to three per cent against banks' standard fees."
Notes to Editors
Fully regulated by the FSA, Currency UK is one of the UK's leading foreign exchange brokers, ensuring individuals and companies can access the best rate for currency transfers across FX markets.
A major participant on the foreign exchange market, Currency UK regularly offers the most competitive rate on currency exchange and has moved millions of pounds around the globe for its clients.
Currency UK is a member of the Association of International Property Professionals (AIPP) and is the preferred foreign exchange partner of the Offshore Financial Trade Association (0FTA).