Dutch bankers are furious that virtually no foreign bank in the Netherlands will have to comply with strict new limits on bonuses due to come into effect on January 1 2015.

The government is introducing a 20% ceiling on bankers’ bonuses, but most foreign banks will not have to comply with the Dutch law because they operate from a branch office.

These branches operate under European law which allows banks to pay a bonus of 100% of annual salary.

Unfair competition

Dutch bankers are particularly concerned about Royal Bank of Scotland and Deutsche Bank which will profit from unfair competition. ‘They are furious,’ a source told the Financieele Dagblad, ‘because this will lead to big differences in rewards.’

RBS and Deutsche Bank took over parts of ABN Amro in 2007, but RBS has already transferred many of the Dutch bank’s activities into a British corporation and Deutsche Bank is set to follow suit.

‘The new law on bonuses does not apply to us,’ RBS’ Jan de Ruiter told the FD. ‘We are a branch office. The Netherlands is going further than Europe with the bonus limits and therefore accepts there will not be an even playing field. We cannot do anything about that.’

Earlier this year, ABN Amro increased the basic salary of its senior staff by 20% to compensate for the bonus limits. Rabobank has done something similar. Neither bank has managed to completely fill the difference.