October 17, 2013 / 3:02 PM / in 6 years

Rabobank bows to public pressure over executive bonuses

AMSTERDAM, Oct 17 (Reuters) - Dutch lender Rabobank said on Thursday it has abolished bonuses for its executive board members in view of public opinion over bankers’ pay.

Rabobank, which is in the midst of sweeping job cuts, branch closures and reductions in remuneration packages, was one of the few Dutch financial services groups to avoid nationalisation or a state bail-out in the 2008 financial crisis.

ABN AMRO was nationalised and both ING and Aegon were bailed out by the state in 2008. SNS Reaal, initially bailed out, was nationalised earlier this year.

Those bank rescues, and high salaries earned by senior bankers, have prompted a public outcry at a time of budget cuts and austerity measures.

One of several banks named by the authorities in the international Libor interest rate rigging scandal, Rabobank had previously said that it would scrap bonuses for the executive board in 2012 and 2013.

“With the abolition of variable remuneration for the executive board, we are taking into account the views of our key stakeholders: our customers and members. In addition, we respond to widely held public views regarding bank executives’ pay,” Wout Dekker, chairman of the supervisory board, said in a statement.

“The supervisory board has concluded that variable remuneration for our executive board is no longer compatible with the economic role Rabobank plays in Dutch society.”

Earlier this year, Rabobank announced it would cut wage increases for its 35,000 employees in the Netherlands until 2016 and abolish variable remuneration for most Rabobank employees.

Cooperatively owned Rabobank made an unspecified provision in its first-half results for settling with regulators over the Libor rate scandal, when it reported a 14 percent drop in net profit to 1.1 billion euros, reflecting higher bad debts.

The bank has said about 8,000 domestic retail banking jobs will go by 2016, reducing the headcount in those operations by nearly a third to 20,000. It will close about 300 out of the 800 or so existing branches of its member banks. (Reporting by Sara Webb; Editing by David Cowell)

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