Get involved: send your pictures, video, news & views by texting TIMES NEWS to 80360, or email us
£5.2bn RBS losses fuel bonus row
Royal Bank of Scotland has fuelled more fury over bonuses as it revealed a £607 million haul for workers in spite of recent scandals and another £5.2 billion in losses.
The part-nationalised lender has now racked up five years of losses since being bailed out by the taxpayer, but insisted the core bank would return to financial health next year, paving the way for the Government to start offloading its 81% stake.
Chief executive Stephen Hester - who has already waived his bonus for 2012 - defended its multimillion-pound bonus pot, which includes £215 million for investment bankers, saying its staff were "badly needed" to help turn the bank around.
But the group was slammed for handing out hefty bonuses after recent reputational blows, including its £381 million settlement for attempting to rig interbank lending rates, mis-selling scandals and last year's IT meltdown that left millions of customers without access to their bank accounts.
Mr Hester admitted 2012 had been a "chastening year". He said: "We are determined to overcome the cultural and reputational baggage of pre-crisis times with the same focus we have applied to the financial clean-up from that era."
On plans to cap bonuses revealed in Brussels on Wednesday night, he said "income restrictions have not been encouraging in the past".
Trade union Unite said RBS bosses "turned a blind eye to price fixing and mis-selling". Dominic Hook, national officer, said: "Instead of setting an example to the world and supporting a cultural shift in the banking industry, Stephen Hester refuses to back the EU cap. As the head of Britain's biggest bank he should be showing more leadership and drive change."
Last year's losses widened markedly from £1.2 billion in 2011 after its £381 million settlement for Libor rate fixing, while the bank revealed another £1.1 billion in provisions to cover mis-selling claims and £175 million for the IT fiasco.
It increased cash put by for the mis-selling of interest rate swap products to small businesses by £650 million, on top of £50 million already set aside. RBS also revealed a fourth quarter increase of £450 million to cover claims relating to the mis-selling of payment protection insurance (PPI), taking its total for PPI to £2.2 billion.
It said it had recouped £302 million for its Libor settlement by cutting the 2012 bonus pot from £789 million last year, clawing back long-term incentive payouts from previous years and reducing current year awards.