RBS bonus fury as bankers walk away with £576m in 'astonishing betrayal' to taxpayers

RBS reveals staff bonus pot despite slumping deeper into the red with £8.2bn losses

Royal Bank of Scotland has sparked fresh outrage for its "astonishing betrayal" to taxpayers after handing out  £576 million in bonuses despite slumping deeper into the red with annual losses of £8.2 billion.

The bank saw losses widen from £5.2 billion in 2012 after setting aside £3.8 billion in provisions for customer mis-selling compensation. It also took a £4.8 billion hit after setting up an internal bad bank. The bank's bonus pool is down 15 per cent on 2012 when it handed out £679 million.

The latest results mark the sixth, and largest, consecutive loss for the lender since it was rescued by taxpayers at the height of the financial crisis in 2008 following an era of reckless expansion under Fred "the Shred" Goodwin.

Chief executive Ross McEwan said the losses were "sobering" and "huge" but defended the bank's bonus pool insisting that the lender must be "pragmatic" when it comes to pay in a bid to "keep people doing their jobs" in a highly competitive industry.

Trade union Unite said the bank's decision to pay out more than half a billion pounds represented an "astonishing betrayal" for taxpayers given the scale of the losses- RBS has lost more than £46 billion in six years.

Chris Leslie, Labour's shadow chief secretary to the Treasury, said: "Taxpayers will be incredulous that such large bonuses continue to be paid out at a time when huge losses are being made.

"George Osborne should also make clear now that he would reject any request from RBS later this year for approval to pay bonuses of more than 100 per cent of salary."

Deputy Prime Minister Nick Clegg warned the bank, which is 81 per cent owned by the UK taxpayer, should show restraint on pay and bonuses.

Speaking on ITV1's Daybreak, he said: "A loss-making bank that is basically on a life-support system because of the generosity of British taxpayers shouldn't be dishing out ever larger amounts of money in pay and bonuses.

"The overall amount has been coming down. It needs to continue to come down. They are entitled to pay their staff what they want when they are standing on their own two feet. At the moment they are not."

McEwan outlined a new plan to make the bank "smaller, simpler and smarter" that will see it shrink from seven divisions to three. RBS did not confirm how many jobs will go as a result of reducing operations.

The bank said its cost-to-income ratio currently stands at 73 per cent. RBS has set a target of 55 per cent by 2017, which "will mean cutting around £1 billion of operational spend on things that don't help our customers," the lender said in a statement.

RBS was recently hit by allegations that it deliberately drove small businesses "to the wall" in  a bid to generate profits from fees and seize assets on the cheap.

The bank has appointed top law firm Clifford Chance to conduct an inquiry into the claims put forward by Government adviser Lawrence Tomlinson in a scathing report last year.

RBS shares fell as much as 9 per cent in early London trading, the biggest faller on the FTSE 100 this morning, which wiped off almost £2 billion of its stock market value.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Brendan O'Carroll as Agnes Brown in the 2014 Mrs Brown's Boys Christmas special
tvCould Mrs Brown's Boys have taken lead for second year?
Arts and Entertainment
Madonna is not in Twitter's good books after describing her album leak as 'artistic rape and terrorism'
music14 more 'Rebel Heart' tracks leaked including Pharrell Williams collaboration
Arts and Entertainment
Jack O'Connell stars as Louis Zamperini in Angelina Jolie's Unbroken
film review... even if Jack O'Connell is excellent
News
peopleIt seems you can't silence Katie Hopkins, even on Christmas Day...
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Selby Jennings: Oil Operations

Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...

The Jenrick Group: Night Shift Operations Manager

£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...

SThree: Trainee Recruitment Consultant - LONDON

£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Day In a Page

A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

Christmas without hope

Gaza fears grow that conflict with Israel will soon reignite
After 150 years, you can finally visit the grisliest museum in the country

The 'Black Museum'

After 150 years, you can finally visit Britain's grisliest museum
No ho-ho-hos with Nick Frost's badass Santa

No ho-ho-hos with Nick Frost's badass Santa

Doctor Who Christmas Special TV review
Chilly Christmas: Swimmers take festive dip for charity

Chilly Christmas

Swimmers dive into freezing British waters for charity
Veterans' hostel 'overwhelmed by kindness' for festive dinner

Homeless Veterans appeal

In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

Yazidi girls killing themselves to escape rape and imprisonment
Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

Ed Balls interview

'If I think about the deficit when I'm playing the piano, it all goes wrong'
He's behind you, dude!

US stars in UK panto

From David Hasselhoff to Jerry Hall
Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

Grace Dent's Christmas Quiz

What are you – a festive curmudgeon or top of the tree?
Nasa planning to build cloud cities in airships above Venus

Nasa planning to build cloud cities in airships above Venus

Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all