RBS to Pay £1.7 Billion in Bonuses despite £3.6 Billion Loss

Royal Bank of Scotland (RBS), which is 84 per cent owned by the British taxpayer, will pay out up to £1.7 billion in bonuses to its bankers after reporting a £3.6 billion pre-tax loss for the past financial year.

The loss for the 12 months to December 31 is less than the £5 billion expected and far below the £24.3 billion loss that RBS reported for 2008, a record for any British company.

However, the bank is facing criticism over its decision to reward investment bankers with bonuses worth £1.3 billion, or 27 per cent of its revenue, after receiving billions of pounds in taxpayers' money during the recession to save it from collapse. Other staff will share up to £400 million in bonuses.'

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RBS Braced for Bonus Row With Planned £1.3 Billion Payout

Loss-making Royal Bank of Scotland is braced for a row over City pay next week when it is expected to admit that its bonus pot for 22,000 investment bankers has reached £1.3bn – against last year's £1bn.

The Edinburgh-based bank is awaiting approval from UK Financial Investments, the body that looks after the taxpayer's 84% stake in the bank, for its proposed bonus pool. Chancellor Alistair Darling has yet to receive a formal presentation about the proposals, which he can veto. He has already said that bonuses cannot be paid in cash to anyone earning more than £39,000, which would affect most of the workforce in the investment bank.

RBS, which a year ago announced the biggest loss in British corporate history, is on Thursday expected to show that its losses have narrowed.

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