Some big banks should be broken up to bolster returns to shareholders and make it less likely their collapse will damage the financial system, according to analysts at Berenberg.
They argue that over the longer term small banks perform better than big banks and shareholders could push for the break up of some banks in the future.
The analysts warn, though, that bank bosses have little incentive to change the way their businesses are organised: after reviewing bankers’ pay over eight years, the analysts found “little correlation between shareholder return and CEO pay”.
“In our review of bank remuneration policies, size and complexity appear to be the biggest drivers of pay,” the analysts said.
They conclude that the banks which have the most potential for change are Barclays, Credit Suisse, Santander and Unicredit but also list “long-term winners” which include HSBC and UBS.
