James Moore: Bank bosses' bonuses will not be deserved

Outlook Bankers are starting to feel good again. Anyone who attended the last round of results presentations could see that for themselves. It was most notable at Lloyds, whose chief executive, Eric Daniels, accustomed to glowering at all and sundry, actually managed to crack a smile or two. Profits have returned. It's bonus time again!

So don't expect a repeat of this year when the chief executives, at least, fell over each other to give up their bonuses, at the next reporting season. Each bank will likely put up its chairman to explain that the numbers their chief executives have put up means that they thoroughly deserve to lap at the cream.

Except, according to a report by Standard & Poor's yesterday, they don't. If January shows a continuation of the banking sector's recovery, S&P's analysts say it won't be down to managements. To be fair, they do note that bank bosses have done some things to improve performance – largely by keeping a lid on costs. But it hardly takes inspired management to do that. Just ask Sir Fred "the shred" Goodwin, who regularly juiced his numbers when he needed with the help of redundancy programmes.

In the view of S&P, "the more important contributory factors [to the improvement in performance] were the developments beyond the control of the banks' management". These were government stimulus packages, the partial recovery of property markets, and the relatively resilient employment market. S&P doesn't believe bank managements will be able to do much to influence future performance either, which will depend largely on the economy and how this impacts on loan losses. In other words, this time they got lucky and about the best they can do over the coming months is hope that they get lucky again. S&P's report is worth filing away for when bank bosses start talking about how they deserve the multimillion-pound bonuses they will be paying themselves at the end of the year.