Banks taking fizz out of staff Christmas parties

Banks are worried about how they will be perceived if they throw lavish Christmas parties. Photo / Northern Advocate

Royal Bank of Scotland, recipient of the world's biggest banking bailout, is contributing £10 ($22.74) a head toward employee Christmas parties this year, enough to buy two pints of lager and a packet of crisps.

"The banks just aren't doing anything in terms of Christmas parties this year because they're worried about how they will be perceived," said Mike Kershaw, chairman of Concerto Group and an events planner for more than 25 years.

The Edinburgh-based bank is among firms limiting entertainment budgets this year to avoid inflaming public anger after taxpayers provided more than £1 trillion to bail out lenders including RBS and Lloyds.

British companies have traditionally offered employees a party or gift at Christmas. Ebenezer Scrooge epitomised the ideal in Charles Dickens' 1843 novel A Christmas Carol, by belatedly sending a prize turkey to his chief clerk.

Di Bailey, managing director at Planit Events, whose clients include HSBC and Morgan Stanley, recommends employers spend about £80-a-head to ensure a "decent" party.

Bailey said she couldn't organise an event at a cost of £10-per-employee and recommended staff use the money to go ice-skating instead.

RBS is making as much as £10 available per employee this year, a person familiar with the situation said. Two pints of Kronenbourg lager and a packet of salt and pepper flavoured crisps cost £8.21 in the Master Gunner pub in London's Broadgate district. An hour's skating at the Tower of London Ice Rink costs £10 an hour off-peak.

"Our staff have worked very hard over the last 12 months," said Piers Townsend, an RBS spokesman. "We won't waste bank money, but the longstanding tradition of paying a small contribution towards staff parties has been judged appropriate."

HBSC, Europe's biggest bank, will contribute £20 a head, according to spokesman Brendan McNamara. At Lloyds, which received £22.8 billion of state aid, employees can spend as much as £35 of company money a head. Barclays spokesman Jon Laycock declined to comment. The banks did not give a figure for previous end-of-year entertainment spending.

"We very much appreciate the financial difficulties many households face because of the current financial climate," said Heather Scott, a spokeswoman for Lloyds. "Like many other major organisations, we continue to take a sensible and prudent approach to colleague-related activity."

Standard Chartered spokesman Jon Tracey said the bank was planning a "small" party. Commerzbank AG's Claire Tappenden in London said the lender had held a "small" event, but declined to elaborate on the details.

Events organisers say banks spent more on parties last year, even as the global financial system experienced the worst financial crisis since the Great Depression.

In the US, Goldman Sachs canceled its holiday party for a second year, the Wall Street Journal said, citing a spokesperson.

Bank of America isn't holding any seasonal staff celebrations and nor is Citigroup, which has also banned its employees from funding their own parties, the newspaper said.

London's restaurants are also feeling the squeeze as spending is cut.

- BLOOMBERG