RBS defends bonuses after £3.6bn loss

Published: 8:33AM GMT twenty-five February 2010

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Royal Bank Of Scotland Group

The part-nationalised bank will compensate out about �1.3bn in bonuses for 2009 even though RBS remained in the red. Stephen Hester, the bank"s arch executive, pronounced RBS is a "prisoner" to marketplace rates on compensate and will go on to lose key staff since it can"t compensate more.

RBS"s loss is down significantly from the �24.3bn in 2008 - a jot down for a UK association - and the improved opening derives partly from the tellurian markets multiplication that trades debt, currencies and commodities. The commercial operation done an handling distinction of �6.35bn last year compared with a loss of �1.27bn in 2008.

RBS investment arm done some-more income than all the rest of the bank Former bank bosses Sir Fred Goodwin and Andy Hornby face barbecuing by MPs currently Mandelson attacks RBS plans to compensate bankers bonuses RBS and Lloyds risk open recoil over bonuses, Mandelson warns Wimbledon 2009: RBS criticised for �300,000 corporate liberality check RBS warns of serve pursuit waste

The bank"s assertive lending and expansion, that culminated in the catastrophic bid for Dutch bank ABN Amro in 2007, incited it in to one of the majority fantastic casualties of the monetary crisis. Former arch Sir Fred Goodwin was suspended after RBS incited to the Government for some-more collateral in the autumn of 2008 as Britain"s retrogression deepened.

With the economy still stranded in retrogression for majority of 2009, the bank was forced to write off �13.9bn in bad loans. However, shares in RBS, 84pc owned by the state after receiving �53.5bn of taxpayer support, rose some-more than 5pc in early trade after the bank pronounced that the bad loans have probably peaked.

The preference by Chancellor Alistair Darling to pointer off bonuses will hint critique since the economy is hardly crawling out of recession. The lapse of the large payouts in the City and on Wall Street small some-more than a year after the monetary complement was close to fall is proof a headache for politicians on both sides of the Atlantic.

Sir Philip Hampton, the authority of RBS, pronounced that recommending less in bonuses would have "undermined the essential core of the commercial operation and shop-worn shareholder worth had we endorsed less."

RBS is underneath huge vigour to keep bent in what is the majority essential multiplication and right away executive to the liberation plans. It is already struggling to contest on compensate since all bonuses for staff earning some-more than �39,000 are to be paid in shares and paid in instalments in next to instalments over 3 years. Two tip investment bankers give up progressing this month in protest.

Mr Hester, who took over from Sir Fred and has waived his own bonus, is anticipating the bank"s low compensation-to-income comparative measure will infer it is demonstrating restraint. Barclays paid out 38pc of the investment promissory note income to staff, who took home an normal of �191,000 each. RBS"s comparative measure is 27pc.