Still have a job? Say bye to perks, bankers told

By Olesya Dmitracova

LONDON (Reuters) - "How about McDonald''s for lunch?" Only a year ago top London restaurants buzzed with high-earning bankers but the money-saving quip from one financial recruiter sums up the new mood of austerity.

His client at a large investment bank replied: "It would probably have to be if we were paying," the recruiter told Reuters.

The near-limitless expense accounts of the boom years have been replaced by a new probity and the banking industry''s survivors are cutting costs, as they seek to adjust to a slump in business and multi-billion dollar state bailouts which have made them pariahs.

"There is a new austere mood that you can''t be seen being too loud and too brash for fear of people having a go at you," said a senior investment banker in London.

The frugality is hitting jobs, bonuses and perks for banking employees such as free fruit at work and taxis home.

Only two years ago, bankers could commonly spend 3,000 or 4,000 pounds ($5,663) just on lunch, and sometimes that much on wine alone, in a Michelin-starred restaurant like Pied a Terre in west London.

Now the restaurant, along with other upmarket London eateries, is taking part in a promotion offering huge discounts to clients.

Banks, insurers and asset managers have announced around 300,000 layoffs since August 2007. Wall Street firms slashed cash bonuses for New York City staff by 44 percent in 2008, according to a state report last week.

In London, investment bankers'' bonuses will likely be down 60 percent, while many will receive no end-of-year award at all, said Sophie Black, a remuneration consultant at accountancy firm Ernst & Young. Asset managers'' bonuses will be down 30 to 40 percent, she added.

In Europe, UBS, which received a Swiss government bailout last year, said it is reducing 2008 bonuses for its investment bank by more than 80 percent.

FAREWELL TO FLOWERS

Examples of pressure on all expenses at banks are plentiful.

Royal Bank of Scotland has cut the hospitality budget for the Six Nations rugby championship it sponsors by 90 percent, said spokeswoman Linda Harper.

"We are, of course, reviewing all our sponsorship activity as we look to cut costs across our businesses," she added.

Many bankers attending the World Economic Forum in Davos last week switched from vintage Dom Perignon champagne to ordinary champagne and white wine, caterers told one television channel.  Continued...