UK bank profits for 2011 have been revealed over the past couple of weeks. HSBC, the largest bank in Europe, made a record profit of £13.8 billion. Barclays made £5.9 billion, and Santander made £4.48 billion. Lloyds and Royal Bank of Scotland, the other two main high street banks, and the two part-owned by the government, made a loss of £3.5 billion and £2 billion respectively.
Just as the balance sheets and profits have become more transparent, so have the people who run these mega financial institutions become ever more in the public eye. Especially those at the forefront of Lloyds and RBS, compelled to give up their bonuses by a series of outraged politicians, journalists and trade unionists.
So how should we feel about these huge sums? Revulsion, for those who earn so much, when so many others are struggling? Sympathy, for Lloyds and RBS workers who miss out, compared to their colleagues at HSBC and Barclays? Or something inbetween? Does the fact that a 50% tax rate is paid on all these extravagant bonuses make them acceptable in a market-based environment? Or is it outrageous, in a society where the national average wage is less than £22,000.
The truth is, the problem goes far deeper than bankers. Chief executives and senior directors of all publicly traded companies are now paid an average of 400 times more than they received in 1980. The average worker has only seen his pay grow three times during the same period. In 2011 alone the pay for FTSE 100 senior directors increased by 49%. The average UK salary rose by less than 3% in the same year.
The gap between the highest paid and lowest paid in our society has not been this wide for over 100 years. Rather than simply seeing some bankers handing in their individual bonuses, we need to see a whole change in culture across the business world. Let’s pray for a greater sense of corporate responsibility, where profits are invested in worthwhile community and Kingdom projects, rather than being concentrated in the richest 1% of society.