RBS defends paying 'fair' £576m in bonuses after losing £8bn

Chief executive admits taxpayers had 'had enough' of disappointments from the bank

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.

Start your day with The Independent, sign up for daily news emails
  • Get to the point
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

Recruitment Genius: Financial Adviser

£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Guru Careers: Application Support Analyst / 1st Line Support

£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...

Guru Careers: .NET Developer / Web Developer

£45K - £55K (DOE) + Benefits: Guru Careers: We are seeking a full stack .NET D...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence