RBS was engulfed in controversy again yesterday as it defended plans to pay £576m in bonuses despite reporting a staggering £8.2bn pre-tax loss and admitting it is the UK's "least trusted bank".
Ross McEwan, the chief executive, said the bank needed to pay "fairly" as the bonus pool dropped from £674m in 2013, even while admitting taxpayers had "had enough" of disappointments from a bank they spent more than £40bn on bailing out.
But Andrew Tyrie, the chairman of the Parliamentary Commission on Banking Standards, said the payouts to its bankers demonstrated the need for a "fundamental reform of the bonus culture" as critics from both sides of the political divide targeted RBS.
Mr Tyrie maintained the bank's introduction of three-year deferrals on bonuses would "do little in many cases to match the rewards to the maturity of the risk".
He added: "The losses were partly caused by past misconduct and poor lending decisions. It is likely many who took those decisions were rewarded for them. Their remuneration should have been subject to deferral and claw-back – paying for their mistakes."
Frances O'Grady, the general secretary of the TUC, said: "There would be no RBS had it not been bailed out to the tune of billions by taxpayers. Ordinary people will be wondering how on earth a bank that has made such huge losses for six consecutive years can find a penny in bonuses, let alone the hundreds of millions announced today."
She said the money should be spent on getting the bank "back into shape".
The City's verdict was an unequivocal thumbs-down, with the shares closing at 326.6p, down 24.4p. Analysts feared the bank's turnaround plan would take longer than expected. The results were hit by a poor fourth-quarter revenue performance.
Mr McEwan gave a stark assessment of the problems facing RBS, saying: "We are too expensive, too bureaucratic and we need to change. At some point the Government will want to get out, but that is in their hands. What is driving me is nothing to do with the price of shares."
He plans to cut costs by £5.3bn by the end of 2017, but this will mean thousands more job cuts on the ground among a workforce already reeling from a succession of redundancy programmes.
Taxpayers paid an average 500p a share during the £45bn bailout of RBS in 2009 and are still nursing a near-£16bn paper loss on the stake.
Looming over RBS is a regulatory probe into the activities of its Global Reconstruction Group, which deals with "distressed" businesses. The treatment of small business has faced searing criticism.Reuse content