Goodwin faces angry staff but RBS shareholders let him off the hook

It was hardly the most militant of protests but it was enough to unnerve some shareholders as they gathered for the annual meeting of Royal Bank of Scotland in Edinburgh yesterday.

Up to 40 placard-waving bank workers and representatives from their union, Unifi, lobbied outside the Edinburgh International Conference Centre protesting at a wage increase of less than £1 a week for thousands of employees of Britain's second-biggest lender, which recently announced record pre-tax profits of £7.1bn.

Their anger has been fuelled by revelations that RBS chief executive Fred Goodwin received an annual bonus of £990,000 as part of a total salary and bonus package of £1.9m for 2003, plus shares worth about £1.3m. "Bank clerks traditionally are not a militant group but many of our members are disgruntled and angry that up to 25,000 staff will not get a pay rise to keep up with inflation, and 4,700 will be getting no pay rise at all," said Rob MacGregor, Unifi's national officer.

"With a bank that is making such huge profits we could have asked for a double-digit rise or an inflation-busting award but we haven't. All we want is to make sure RBS staff can earn a proper living wage."

The bank's chairman, Sir George Mathewson, yesterday claimed any staff who were not getting a wage rise were either underperforming or at the top of their salary scale, which he said was up to 20 per cent above the national average.

However, inside the AGM there was little dissent from shareholders, who voted almost unanimously for a final dividend of 35.7p, making a 15 per cent increase in the total payout to 50.3p - the same rate of increase for each of the past 11 years, as they heard that the company's successes were on track to continue.

Shortly before the meeting Mr Goodwin said attention was now being focused on acquisitions in the US, where he said some prices were justifiable. "There are no bargain-basement prices on good quality banks, but there is do-ability around pricing," he said.

Last year RBS bought five US banks to expand its Rhode Island-based Citizens Financial Group, which it acquired in 1998, and in February it agreed to buy the credit-card unit of Connecticut-based People's Bank for $2.66bn to gain 1.1 million new customers in New England.

However, as far as the UK is concerned Mr Goodwin ruled out any bid for domestic rival Abbey National or the life assurer Standard Life, Europe's biggest mutual assurer, which plans to float its shares.

"We would not be allowed to buy Abbey. We had a dress rehearsal with Lloyds TSB trying to buy Abbey. It was ruled out by the Competition Commission and our market share is bigger than Lloyds, so it wouldn't happen," he said.