Banks drop their 2008 bonuses

BANKS have withdrawn bonuses for their directors after President Sarkozy made it a condition to receive government funds.

Previously the heads of Société Générale and Crédit Agricole had claimed that their “variable bonuses” had already been awarded.

However the board of directors of both banks have since announced that the bonuses have been withdrawn.

The statements came just ahead of a meeting between bank leaders and President Sarkozy yesterday.

The heads of France’s other top banks including BNP Paribas, Crédit Mutuel, Caisse d'Epargne and Banque Populaire had already agreed to drop their bonuses.

The banks have also agreed to reduce the dividends paid to shareholders and prioritise getting their own finances in order.

The government is preparing to use €10.5 billion in a new attempt to relaunch the lending industry.

President Sarkozy said the meeting “underlined the importance” of engaging the banks during a period of economic slowdown.

He said that the situation of French banks had improved since September last year and was better than that of their European competitors.