Bleak message for RBS shareholders

Royal Bank of Scotland's chairman, Sir Philip Hampton, warned investors that he did not think "shareholders' wealth is likely to be restored in my lifetime" yesterday, but said that returning to the dividend list was the bank's "top priority".

He also told investors at RBS's annual meeting in Edinburgh that he had sympathy with critics of bank bonuses, but defended the part-nationalised bank's own pay proposals.

"I do accept that some people in some organisations have been significantly overpaid in the financial sector in recent year,s but I would not say that for RBS," Sir Philip said.

He also said that UK Financial Investments (UKFI), which manages the Government's stake in RBS, was a "pretty tough taskmaster" on executive pay.

"The UKFI and our institutional investors were strongly supportive of the bonus proposition in relation to [chief executive] Stephen Hester and strongly supportive of our pay arrangements in general," he said.

Mr Hester waived his proposed all-share bonus worth £963,000 earlier this year amid a public outcry.

More than 99 per cent of investors, including UKFI, yesterday supported RBS's pay plans.