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| RBS pays out £588m in bonuses despite suffering £8.24bn loss | RBS pays out £588m in bonuses despite suffering £8.24bn loss |
| (35 minutes later) | |
| Royal Bank of Scotland plans to pay £588m in staff bonuses despite suffering an £8.24bn loss for last year. | Royal Bank of Scotland plans to pay £588m in staff bonuses despite suffering an £8.24bn loss for last year. |
| The size of the bank's bonus pool fell 18% from last year. Ross McEwan, chief executive, said the figure for bonuses was "highly emotional" but that he had to pay people close to the market rate. | The size of the bank's bonus pool fell 18% from last year. Ross McEwan, chief executive, said the figure for bonuses was "highly emotional" but that he had to pay people close to the market rate. |
| "I need to pay people these people fairly in the marketplace to do the job. I do need to make sure we are there or thereabouts and that is all I'm asking for," he said. | "I need to pay people these people fairly in the marketplace to do the job. I do need to make sure we are there or thereabouts and that is all I'm asking for," he said. |
| The loss was caused by £3.84bn of costs for settling litigation and regulatory problems, including compensating payment protection customers in the UK, and £4.5bn of losses for setting up a unit for bad assets. | |
| McEwan, who took over from Stephen Hester in October, said RBS needed to regain the trust of its customers and the public. His plan to turn the company around includes: | McEwan, who took over from Stephen Hester in October, said RBS needed to regain the trust of its customers and the public. His plan to turn the company around includes: |
| • Shrinking RBS from seven businesses into three: personal and business banking, commercial and private banking, and corporate and institutional banking. | • Shrinking RBS from seven businesses into three: personal and business banking, commercial and private banking, and corporate and institutional banking. |
| • Simplifying products for retail and small business customers, including scrapping "teaser rates" and 0% credit card transfers. | • Simplifying products for retail and small business customers, including scrapping "teaser rates" and 0% credit card transfers. |
| • Cutting costs because the bank is "too expensive and too bureaucratic". | • Cutting costs because the bank is "too expensive and too bureaucratic". |
| Bankers' bonuses continue to plague the industry amid public uproar over past misconduct. | Bankers' bonuses continue to plague the industry amid public uproar over past misconduct. |
| McEwan said his plan would take up to five years to complete, casting doubt on the government's ability to sell its 81% stake any time soon. McEwan said any sale was for the government to decide but that he was concentrating on making the bank trusted again. | McEwan said his plan would take up to five years to complete, casting doubt on the government's ability to sell its 81% stake any time soon. McEwan said any sale was for the government to decide but that he was concentrating on making the bank trusted again. |
| He said 0% transfers and other introductory rates were "abhorrent" and that customers hated them. It was wrong to chase a new customer and "dump them" months later instead of giving the best deal to an existing customer. | He said 0% transfers and other introductory rates were "abhorrent" and that customers hated them. It was wrong to chase a new customer and "dump them" months later instead of giving the best deal to an existing customer. |