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RBS attacked for 'bloated bonuses'
Royal Bank of Scotland has insisted it will be fit for a return to the private sector by the end of 2014, but faced anger over "bloated bonuses" after recent scandals and mounting losses.
The part-nationalised lender revealed a £607 million bonus haul for staff, including £215 million for investment bankers, despite plunging into the red by £5.2 billion in 2012.
RBS has now racked up five years of losses since being bailed out by the taxpayer at the height of the financial crisis. Bosses said improvements in the core bank would see it return to financial health next year, paving the way for the Government to start offloading its 81% stake in what would come as a well-timed pre-election boost.
However, the group was slammed for handing out hefty bonuses after recent reputational blows, including its £381 million settlement for attempting to rig interbank lending rates, mis-selling scandals and last year's IT meltdown that left millions of customers without access to their bank accounts.
Labour Treasury spokesman Chris Leslie said: "We need radical change in the culture of our banks and that must include reining in bloated bonuses, which are a device for keeping traders focused on the weeks ahead, rather than years ahead."
Prime Minister David Cameron's official spokesman said no timetable had been set for selling off the Government's share in the bank, adding RBS has shown "responsibility and restraint" in the bonus payouts.
Facing union accusations of turning a "blind eye to price fixing and mis-selling", RBS chief executive Stephen Hester - who has already waived his bonus for 2012 - said its staff were "badly needed" to help turn the bank around. But he admitted 2012 had been a "chastening year".
"We are determined to overcome the cultural and reputational baggage of pre-crisis times with the same focus we have applied to the financial clean-up from that era," he said.
RBS shrugged off European Union plans to cap banker bonuses, saying City bonuses were "significantly less of a problem than a few years ago".
Bonuses will also be in sharp focus on Friday when fellow taxpayer-backed player Lloyds Banking Group reports its full-year figures amid reports that chief executive Antonio Horta-Osorio is in line for a £1.4 million award. Lloyds is also expected to remain in the red last year, with experts pencilling in losses of £544 million after more hefty mis-selling provisions.