UBS and Merrill Lynch pay double to lure best bankers

UBS and Merrill Lynch are being forced to double the base salaries they offer new staff to attract the best applicants, it emerged today.

As the financial markets recover from last year's turmoil, competition to hire the best has become cut-throat once more, meaning potential hirers have to pay top dollar to lure high-performing executives.

UBS and Merrill Lynch, now part of Bank of America, are offering to pay managing director-level securities executives basic pay of as much as £300,000 and £230,000 as they fight to hire, having shed hundreds of London staff last year.

A year ago, those MDs would have been offered about £150,000, sources said.

"Some of these firms were haemorrhaging talent, and those gaps are being filled in a hurry," said Simon Hayes, head of financial services at recruitment firm Odgers Berndtson.

The figures highlight the dilemma facing taxpayer-owned RBS, which is deciding how much it can pay its staff in bonuses for last year without provoking the fury of the Government.

RBS says it needs to be able to retain and hire good people in order for its investment bank to make big profits for taxpayers, but it also needs to be sensitive to the public anger over bankers' pay.

"In the world of investment banking, it's a simple case of who pays wins," said John Purcell, managing director of search firm Purcell & Co. "Institutions that are fairly directly under political control are facing significant difficulties retaining staff."

UBS and Bank of America Merrill Lynch are no longer taxpayer owned, leaving them free to set pay.