KPMG's UK staff will share £100m in bonuses this Christmas, the firm has said, as its chairman warned that the profession is 'on trial' over the bank valuations crisis.
As the credit crunch bites, UK KPMG chairman John Griffith-Jones said: 'The banks are tremendously busy as you would expect, getting the accounts right this year end. Clients, and the profession as a whole, are on trial.'
The UK firm reports a turnover of £1.6bn today – recording 11% growth on the previous year's £1.45bn figures.
The firm's £100m bonus pool is dedicated to all staff who are not partners, and is, the firm claims, 'the most substantial bonus pool of all UK accounting firms.'
The firm's overall profit for the year rose by 20% to £447m, up from £374m in 2006.
Partners particularly had a good year with 19% average increase in profit per partner to £806,000, also up from £680,000 in 2006.
The growth was across all service lines, with audit up by 6%, tax up by 11%, and advisory up by 13%.
The firm's chief executive Colin Cook admitted it was beginning to see the first effects of the credit crunch.
'Conditions have changed. They're not the same for M&A as they were six to nine months ago. August was clearly a big problem. Between August and now, people have begun to understand the extent of the credit crunch and seeing conditions which are, broadly speaking, benign, turning around gradually. Now there are particularly fewer buyout transactions, as there's a shortage of acquisition finance for them,' said Cook.
The firm is the first to report figures for the period including the credit crunch, with numbers to the end of September. The rest of the Big Four report to mid-year end-dates.
The firm's chief operating officer described overall growth rates as 'slowing slightly'.
'The argument is whether the markets will pick up. What will the bank's balance sheets look like at the end of December? Questions remain about whether these may escape into the wider economy,' said Cook.
Speaking on the turmoil of the markets and challenges facing auditors, Griffith-Jones said these challenges were bigger with bigger banks.
'It would really set the profession in good stead [to get this right],' Griffith-Jones said.
He also brushed off concerns about the City losing business as a result of loss of confidence resulting from the Northern Rock crisis and the non-dom crackdown.
'The city has been a cyclical place since time immemorial.'
But he added: 'Ensuring the Tripartitie arrangements work is very very important.'
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