Investment bankers thought to be in line for £5bn payout

Some 24,100 staff at Barclays Capital, the bank’s investment arm, are in line to receive an average £210,000, the Sunday Times said, which would include all salaries, bonuses and other benefits.

A £5 billion pay pot would mark a 10 per cent decrease on last year’s remuneration, but is still likely to provoke outrage from groups who have campaigned for a crackdown on City pay since the 2008 credit crunch forced taxpayers to bail out Royal Bank of Scotland, Lloyds Banking Group and Northern Rock.

Sir Meryvn, in his role as chairman of the Financial Policy Committee, last week recommended that banks consider limiting pay and dividends in order to maintain sufficiently high levels of capital to protect from potential future financial shocks, such as the collapse of the euro or a downgrade to the UK’s credit rating.

Elsewhere, the Independent on Sunday said RBS, which is 83 per cent owned by the taxpayer, is expected to pay £500m in bonuses to its investment bankers, an amount which would be confirmed in February. This would be down on the £950m paid out last year.

Barclays did not require a bailout in financial crisis but its reputation as one of the top-paying banks has drawn criticism, with its chief executive Bob Diamond once dubbed “the unacceptable face of banking” by Lord Mandelson, the former business secretary.

Sir Mervyn said UK banks were in a better position than their continental peers to withstand future shocks but should still build up sufficient capital levels to protect from major events.

Barclays and RBS were not immediately available for comment.