Feb 28 2013 By Cheryl Mullin
ROYAL Bank of Scotland 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 multi-million pound bonus pot, which includes £215m 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 £381m 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 last night, he said “income restrictions have not been encouraging in the past”.
Last year’s losses widened markedly from £1.2bn in 2011 after its £381m settlement for Libor rate fixing, while the bank revealed another £1.1bn in provisions to cover mis-selling claims and £175m for the IT fiasco.
It increased cash put by for the mis-selling of interest rate swap products to small businesses by £650m, on top of £50m already set aside.
RBS also revealed a fourth quarter increase of £450m to cover claims relating to the mis-selling of payment protection insurance (PPI), taking its total for PPI to £2.2bn.