Walters warns that bank bonus rules ‘are a minefield’

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That's the view from veteran professional services headhunter Robert Walters whose recruitment firm today reported a dip into the red in the first half of the year. Walters said: "The City recruitment market is better but the feel is that it is only better for now. The market is more robust than it has been for some time. But it is not a recovery. It is more a correction from the over-firing that we saw earlier in the year.

"What we saw earlier in the year was quite savage in terms of headcount reduction. What we are now seeing is a rebalancing of those cuts.

"One big problem the market has, however, is bonus-capping. It is a minefield.

"We are seeing basic salaries going up but as to how banks deal with bonuses is another matter.

"What we could see is a two tier-banking system: the UK and US banks which are Government-backed adhering to the rules and others not."

Robert Walters reported a pre-tax loss of £2.6 million in the first half as fees fell 30% to £50 million. A year ago it made first-half profits of £9.8 million.

The interim dividend is maintained at 1.4p.