Struggling bank scraps bonuses for directors

DIRECTORS at Yorkshire Bank have had their annual bonuses scrapped after the lender admitted business performance is “not where it needs to be”.

The Australian-owned bank has been struggling with the economic downturn and plunging commercial property values. It has also had to set aside £220m to compensate customers for mis-selling payment protection insurance.

Latest accounts for Yorkshire’s parent company Clydesdale Bank Group show that chief executive David Thorburn and executive director John Hooper received no payments under the company’s short-term incentive scheme.

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Mr Thorburn received salary and benefits of £510,000 and Mr Hooper received £918,000. Last year they were paid bonuses of £320,000 and £515,000 respectively.

The UK group is carrying out a major restructuring exercise and plans to shed 1,400 jobs by 2015. It has transferred £6.2bn of troublesome real estate loans to the balance sheet of its owner, National Australia Bank.

NAB’s remuneration committee decided to axe this year’s bonuses.

A spokesman for Yorkshire Bank said “Directors’ remuneration is very closely linked to business performance and we’ve been clear that’s not where it needs to be. As a result, no annual pay rises will be awarded to the senior management team in the year ahead.”

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Meanwhile, the accounts reveal a worse than originally expected statutory loss for the UK banks.

The spokesman explained: “While our UK banking operations made a cash earnings loss of £139m in the year to the end of September 2012, Clydesdale Bank PLC recorded a statutory loss of £470m.”

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