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Bankers Pay Hikes And Bonuses During Covid-19

There has been much controversy lately over senior bank officers in Malaysia receiving pay hikes, bonuses and other incentives despite the Covid-19 pandemic and the socio-economic straits it has put our country in, including many rakyat experiencing pay cuts or losing their jobs.

It is not wrong for companies—including government-linked ones—to reward and incentivise their talent, even in times of economic difficulty or crisis.

The question we should be asking rather is whether these benefits are justifiable against the performance of these banks.

It is true most of them turned a healthy profit. But we must also not forget that Malaysia’s banking sector is highly regulated now.

Turning a profit is, logically, the bare minimum in terms of how we judge the “performance” of our bankers.

So, what did they do to deserve these magnificent sums?

Also, the fact that the banks were able to pay out benefits like bonuses is surely empirical proof that the 2020 MCO loan moratorium had a negligible impact on the profitability of the banks.

Indeed, the moratorium arguably also helped stave off a deluge of non-performing loans (NPL) from their balance sheets.

As such, it is very strange that the banks and the current administration, particularly the Ministry of Finance, was adamant that the blanket loan moratorium should have been ended.

Why end it if they could still pay out these bonuses?

Why not—especially for the GLC banks who also have a national mission—be more compassionate and not hurt the livelihoods of millions of the rakyat in the pursuit of additional marginal revenue, whose purpose seems to be to fund high bonuses for the selected few?

Again, these are questions that the Boards of these banks and the Ministry of Finance must answer.