Almost 90% of the 131 bankers in Europe who were paid €5m or more in 2014 were based in Britain, according to the latest pay data released by Europe’s banking regulator.
The European Banking Authority said on Wednesday that 3,865 people were paid €1m or more by banks in 2014, including 2,926, or 76%, located in Britain.
The EBA said the rise in high earners was due mainly to a change in exchange rates that meant more people paid in British pounds moved above the €1m threshold.
The watchdog’s annual report on pay practice showed 131 people in banks in the European Union were paid €5m or more in 2014, 115 of whom were based in Britain. The highest earner in the year was paid between €24m-€25m.
London is Europe’s main financial centre and is home to many of the world’s highest paid bankers - not only at British banks, but also at US, Asian and European banks that have big operations in the city.
Germany was the second highest location for high earners, although the number of people earning €1m or more there dropped to 242 in 2014 from 397 a year before. The EBA said the main reason for the drop was fewer high earners in subsidiaries and branches of UK institutions located in Germany.
The report showed there were 171 people who earned more than €1m located in France, 153 in Italy, 119 in Spain, 38 in the Netherlands and 37 in Denmark.
There were also 24 high earners in Ireland, 10 in Portugal and one in Greece.
The watchdog said 2,429 of the high earners, or 63%, were in investment banking. Another 510 were in management roles and 15 were in management supervisory functions, while 237 were in asset management and 122 were in retail banking.
The EBA said banks shifted their remuneration structure for so-called ‘identified staff’, or those in risk-facing roles, towards more fixed pay in 2014, the most recent year it released data for.
Variable pay to high earners averaged 127% of their fixed remuneration in 2014, down from 317% in 2013. Variable pay averaged 65% of fixed pay for all identified staff, down from 104% in 2013, the EBA said.
EU rules started capping bonuses at 100% of fixed pay, or 200% with shareholder approval, in 2014, and the EBA said that cap had not undermined financial stability nor made it harder for lenders to control costs.
The cap was introduced after public anger against bankers pocketing large bonuses at a time of austerity and after taxpayers had to bail out lenders in the financial crisis. Britain tried to block the cap, saying it would force up fixed pay and make it harder for firms to cut costs in a downturn.
“All in all, the bonus cap did not lead to a material reduction in the overall cost flexibility,” the EBA said. “The present analysis shows no indication that the so-called bonus cap has a potentially detrimental effect on institutions’ financial stability.”
EU banks employed 2.9 million staff in 2014, of which 62,787 were identified staff, up from 34,060 in the previous year. Changes to EU rules led to a sharp rise in the number of identified staff, bringing their pay details under more scrutiny.
