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| RBS to pay out £576m in bankers' bonuses despite annual losses of £8.2bn | |
| (about 1 hour later) | |
| Royal Bank of Scotland has reignited the row over bankers' pay after it revealed a bonus pool of £576 million despite slumping deeper into the red with annual losses of £8.2 billion. | |
| The bonus pot includes a £237 million payout for its investment bankers- overall, RBS bonus pool is down 15 per cent on 2012 when it handed out £679 million. | |
| The bank saw losses widen from £5.3 billion in 2012 after setting aside £3.8 billion in provisions to cover mis-selling charges. It also took a £4.8 billion hit to establish an internal bad bank. | |
| The latest figures mark the sixth consecutive loss for the bank since it was rescued by the Government at the height of the financial crisis in 2008. | |
| Chief executive Ross McEwan outlined a new plan to make the bank "smaller, simpler and smarter" that will see it shrink from seven divisions to three. He said the losses were "sobering" and "huge" as he vowed to continue to work to restore trust in the bank. | |
| "Our three customer businesses will cover Personal & Business Banking, Commercial & Private Banking, and Corporate & Institutional Banking. Across the businesses we will have one management team, working to one joined-up plan," he wrote in a letter to investors. | |
| Deputy Prime Minister Nick Clegg said the bank, which is 81 per cent owned by the UK taxpayer, should show restraint on pay and bonuses. | |
| Speaking on ITV1's Daybreak, he said: "A loss-making bank that is basically on a life-support system because of the generosity of British taxpayers shouldn't be dishing out ever larger amounts of money in pay and bonuses. | |
| "The overall amount has been coming down. It needs to continue to come down. They are entitled to pay their staff what they want when they are standing on their own two feet. At the moment they are not." | |
| Last year, RBS was hit by allegations that it deliberately drove small businesses "to the wall" in a bid to generate profits from fees and seize assets on the cheap. | |
| The bank has appointed top law firm Clifford Chance to conduct an inquiry into the claims put forward by Government adviser Lawrence Tomlinson. | |
| More follows |