As we mentioned earlier this week, Citi has been dragging its heels about increasing salaries to offset TARP bonus restrictions.

But now that it’s become clear that the bank won’t be repaying TARP and that rivals doing so will be liberated from related pay restrictions, the pressure is mounting on Citi to do something.

Citi is evidently alert to the danger of its best bankers leaving for better paying alternatives: (contradictory) rumours are starting to trickle out about salary increases at the bank.

On one hand, we understand that managing directors in Citi’s capital markets division have been informed that their salaries will be increased by (a mere) 10%. On the other, we hear that VPs in the investment bank are under the impression that management is contemplating increasing their salaries from £100-150k.

Officially, Citi doesn’t comment on pay issues. If you work there and have had your salary increased, or not, let us know.