European banks could face more pressure from regulators and politicians worried that big cuts in bonuses have barely dented a high-pay culture sustained by massive hikes in base salaries.
A string of banks have grabbed headlines with big reductions in handouts to staff for 2011. Royal Bank of Scotland , 82 percent state-owned after a government bailout, is to cut its bonus payouts for 2011 by 58 percent.
French bank Credit Agricole will lower trader bonuses by 20 percent and larger rivals BNP Paribas and Societe Generale have pledged cuts of 50 percent.
It said although RBS made a loss in 2011, this reflected the business environment and costs from its legacy business.
UKFI said RBS management had made progress in improving performance and had exercised reasonable judgment in its approach to bonuses.
But critics say slicing away chunks of bonus pots by banks masks concerns that base salaries and total pay remain too high.
Some investment banks still hand over nearly half their revenues to staff. Many firms have raised basic pay while cutting annual bonus payments since the crisis.
At RBS's investment bank arm, the compensation to revenue ratio for 2011 rose to 41 percent from 34 percent in 2010, based on staff costs as a percentage of total income.
The bank's average total pay, made up of total salary plus bonus, for its investment bank in 2011 was down 26 percent, a much smaller drop than the cut in bonuses alone.
Bankers have become a focus for public anger over the financial crisis, which tipped economies into recession and left governments with huge debts.
Regulators and politicians have pushed banks to cut back on bonuses as a result.
Bankers, who used to get multimillion pound payouts in some cases, now get less and some payments are in shares and deferred to cut down on excessive risk-taking blamed for the financial blow-up in 2008.
I would hate to be starting out in banking now, said a senior banker based in Europe. Pay isn't what it was and with so much deferred you don't see a lot of it for years but it is still just as hard work, and you are vilified by everyone.
Bankers' bonus expectations were already low because of the political and regulatory pressures.
But business have also suffered from the euro zone crisis, leading to thousands of job cuts across the industry.
People are not expecting a good year. The real revenue generators will still expect and get good pay, but for many employees this year, the bonus will be keeping their job, said a London-based investment banker.
But he also said: The total comp (compensation) might not have changed for a lot of people.
RBS Chairman Philip Hampton defended his bankers' pay.
If our people do two jobs -- build the core business and eliminate the legacy of risk that we inherited -- then we should reward successful progress, he said.
He said pay was a thorny issue and it was right that RBS's pay should be at the lower end of the scale but it could not be too far out of scale with rivals.
On banks' trading floors there is frustration.
The whole subject has got out of hand. The bonus culture as they call it had gone awry but that doesn't mean it should be done away with all together, said one London-based foreign exchange trader, who declined to say how much his bonus had been cut by.
The trader said banks were being vilified for decisions made in the years leading up to the crisis and most trading floors now had much stricter risk parameters.
Everything had got out of hand. It was over the top but most of the villains of the piece have gone.
He said some common sense was needed.
If you are in a frontline trading position where you are primarily judged and rewarded on how much you make, as long as they put sensible risk parameters in place, there's nothing wrong with being paid a bonus.
(Reporting by Kylie MacLellan, Simon Jessop, Nia Williams, Sophie Sassard, Lionel Laurent, Arnaud Schuetze, Naomi O'Leary and Steve Slater; Writing by Jane Merriman; Editing by David Cowell)