£3.5bn RBS loss is staff ’s £421m gain
Bank chief admits bonus payout is ‘outrageous’
TAXPAYER- owned RBS will pay out £421million in bonuses despite posting a seventh straight year of massive losses.
The Edinburgh-based lender made a £3.5billion loss last year, taking the total lost since it was bailed out in 2008 to £50billion.
But in a move even the bank’s boss labelled outrageous, RBS announced it has set aside a staff bonus pot of £421million. This takes the total paid in bonuses since the bailout to £7.6billion.
Chief executive Ross McEwan, who has forfeited a £1million shares payment for a second year since taking the helm in 2013, said the big bonus culture is ‘not something I can change today’.
He said that although the bonus pool was down significantly, people were ‘quite right’ to regard the sum as ‘outrageous’. He added: ‘I understand the issue but I need to be in a position to pay fair pay for people to do these jobs. There are some fairly technical jobs we need to get right.
‘Our bonus pool is significantly down over the last five years, it is down on last year. But what is important is that these same people are the ones that you and I want to get this back to being a great bank that can get the money back for the UK.’
However, Shadow Financial Secretary to the Treasury Cathy Jamieson said: ‘People will be taken aback at the scale of bonuses being paid out this year.’
The 80 per cent state-owned bank received a £ 45.5billion taxpayer rescue at the height of the banking crisis. Since then RBS has racked up losses of almost £50billion and after the latest results warned of more ‘substantial’ job cuts to come.
The losses also mean it could be several years until taxpayers get their money back.
Mr McEwan could offer little assurance to households who contributed to its £ 46billion bailout in 2008. He said it is ‘certainly not going to be months’ before the bank returns to the private sector, adding it would be ‘much shorter’ than ten years.
Campaigners last night baulked at the prospect of such a long wait. Andy Sylvester, from the TaxPayers’ Alliance, said: ‘The bank bailouts have placed a tremendous burden on taxpayers and it is a weight that needs to be lifted. Suggesting it could be as long as ten years will leave taxpayers cold.’
Expectations had been high that RBS could be returning to normality, having made a £2.6billion profit in the first half of the year.
But a £2.2billion bill for fines and litigation and a £4billion charge on its US business have blown it off course.
The lender recently cut its stake in US arm Citizens, a move it blamed for the latest loss.
RBS has already axed more than 30,000 jobs globally since 2008 and the partial sell- off of Citizens will reduce headcount by 18,500 while the planned float of Williams & Glyn will cut a further 4,500.
The union Unite has called for RBS to open negotiations about job losses through the planned restructuring.
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