Re­vealed, ‘shame­less’ RBS dishes out £5bn of bonuses

‘Re­wards for fail­ure’ branded a slap in face for tax­payer

The Scottish Mail on Sunday - - News - By Lor­raine Kelly

THE Royal Bank of Scot­land has paid its top staff bonuses worth £5 bil­lion in the decade since it was bailed out by the tax­payer.

As the tenth an­niver­sary ap­proaches of the £45.5 bil­lion bailout that saved the bank from ruin, new anal­y­sis re­veals the breath­tak­ing scale of pay­ments made to RBS bosses.

The bank, which had bur­geoned into the big­gest in the world un­der chief ex­ec­u­tive Fred Good­win, came within hours of col­lapse at the be­gin­ning of Oc­to­ber 2008 – threat­en­ing the sta­bil­ity of the en­tire UK econ­omy.

The fail­ing RBS was res­cued when the Govern­ment brought it into pub­lic own­er­ship as part of the largest cor­po­rate bailout in Bri­tish his­tory. Since then, RBS has made bil­lions of pounds in an­nual losses, closed hun­dreds of branches across the UK and axed more than 30,000 em­ploy­ees. Yet over the same pe­riod, The Scot­tish Mail on Sun­day can re­veal bank staff have been handed per­for­mance bonuses to­talling £5 bil­lion.

Last night politi­cians, cam­paign­ers and unions ac­cused RBS of ‘un­fairly re­ward­ing its staff for fail­ure’ and said such ‘colos­sal bonuses’ were a ‘slap in the face’ for hard­work­ing taxpayers who funded the bailout and for those who lost money dur­ing the crash. Mean­while:

Se­nior fig­ures warned that taxpayers may never see a re­turn on their in­vest­ment;

The head of the Trea­sury Se­lect Com­mit­tee said the bank’s un­trust­ing cul­ture still ex­ists, a decade on;

The bank ad­mit­ted it still had a lot of work to do on re­gain­ing pub­lic trust.

Ten years ago, RBS was the most suc­cess­ful bank in the world, with op­er­a­tions in more than 50 coun­tries and 200,000 ded­i­cated em­ploy­ees. But af­ter a con­sor­tium led by RBS took over Dutch bank ABN Amro in 2007 for £49 bil­lion, over­stretched RBS was driven to the brink of col­lapse.

Be­tween Oc­to­ber 2008 and De­cem­ber 2009, the Govern­ment had to pour £45.5 bil­lion into the bank to save it, and be­came the ma­jor­ity share­holder with more than an 80 per cent stake.

Since then it has re­duced its own­er­ship to 62 per cent by sell­ing some of its shares to the pri­vate sec­tor – at a loss so far of £3.2 bil­lion to the tax­payer.

Yet ac­counts show that be­tween 2010 and 2017, RBS paid its staff £4.9 bil­lion in bonus pay­ments, handed out in the form of shares, de­ferred bonuses and lump sum pay­ments.

Last night, Steve Mid­dle­ton of BankCon­fi­den­tial, an or­gan­i­sa­tion for whistle­blow­ers who ex­pose prac­tices at big banks, said: ‘It is dis­grace­ful that so many peo­ple – many of whom we be­lieve should have faced crim­i­nal in­ves­ti­ga­tions – are be­ing paid bonuses from the pub­lic purse.

‘It proves RBS hasn’t changed at all in ten years – it is still shame­lessly re­ward­ing staff for fail­ure,

in colos­sal amounts, and it is com­pletely un­fair and a slap in the face to those who bailed it out and to those who were mis­treated by it.’

Scot­tish Con­ser­va­tive fi­nance spokesman Murdo Fraser said: ‘There was an as­sump­tion that the reck­less spend­ing of the past would be stopped.

‘Em­ploy­ees should be en­cour­aged and re­warded, but these bonuses seem to have got com­pletely out of hand. If RBS wants to re­tain the good­will of the Scot­tish pub­lic in terms of the bailout, then it has to do bet­ter than this.’

In con­trast to the ‘per­for­mance’ bonuses, a re­cent re­port by the Com­pe­ti­tion and Mar­kets Au­thor­ity found fewer that half of RBS clients would rec­om­mend its cus­tomer ser­vice to friends and fam­ily, while it ranked joint bot­tom of the per­sonal bank­ing league ta­ble.

In the decade since the bailout, RBS has made thou­sands re­dun­dant, with many jobs ‘off-shored’ to work­ers in In­dia, who can re­ceive as lit­tle as £1.19 an hour.

At the same time the bank closed 1,909 branches, leav­ing only 369, with a fur­ther 54 set to shut in Jan­uary 2019 in Eng­land and Wales. There are now only 89 branches in Scot­land. Rob MacGregor, national of­fi­cer of the Unite union, said: ‘RBS is still as toxic as it was dur­ing the fi­nan­cial cri­sis.

‘When the cur­rent chief ex­ec­u­tive Ross McEwan took over, his mis­sion state­ment said he wanted to make the bank num­ber one for cus­tomer ser­vice and trust, and by any in­de­pen­dent mea­sure, that mis­sion has failed mis­er­ably.

‘They’ve badly let down their cus­tomers, staff and the Bri­tish taxpayers and ten years on it is time for re­flec­tion. And the big ques­tion is, what has re­ally changed?’

Last year the bank made its first profit, of £752 mil­lion, fol­low­ing a £7 bil­lion loss in 2016.

But Nicky Mor­gan, the MP chair­ing the Trea­sury Se­lect Com­mit­tee, be­lieves that de­spite the ‘hard work’ RBS has put in, it is un­likely Bri­tish taxpayers will get their money back.

She told The Scot­tish Mail on Sun­day: ‘Un­like other banks, which have made a big ef­fort to change their cul­ture... peo­ple are un­con­vinced that that process has hap­pened at RBS. And that is why peo­ple are still so un­happy.’

John O’Con­nell of the TaxPayers’ Al­liance said: ‘Taxpayers are rightly still an­gry at how much they had to pay out to RBS ten years ago. They’ll be even an­grier that their taxes have propped up big bonuses.’

An RBS spokesman last night con­firmed the scale of bonus pay­ments but said: ‘The to­tal bonus pool has shrunk by more than 75 per cent since the cri­sis.’

FALL FROM GRACE: Fred ‘The Shred’ Good­win, pic­tured right at the wheel of his rare 1988 BMW, leav­ing home in Ed­in­burgh last Thurs­day

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