Newspaper article The Journal (Newcastle, England)

RBS Close to Going It Alone Once Again; Bonuses and Scandals Still Causing Anger

Newspaper article The Journal (Newcastle, England)

RBS Close to Going It Alone Once Again; Bonuses and Scandals Still Causing Anger

Article excerpt

Byline: Holly Williams

ROYAL Bank of Scotland yesterday insisted it would be fit for a return to the private sector by the end of 2014, but faced anger over "bloated bonuses" after recent scandals and mounting losses.

The part-nationalised lender revealed a PS607m bonus haul for staff, including PS215m for investment bankers, despite plunging into the red by PS5.2bn in 2012.

RBS has racked up five years of losses since being bailed out by the taxpayer at the height of the financial crisis.

Bosses said improvements in the core bank would see it return to financial health next year, paving the way for the Government to start offloading its 81% stake.

However, the group was slammed for handing out hefty bonuses after recent reputational blows, including its PS381m 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.

Labour Treasury spokesman Chris Leslie said: "We need radical change in the culture of our banks and that must include reining in bloated bonuses, which are a device for keeping traders focused on the weeks ahead, rather than years ahead."

Prime Minister David Cameron's official spokesman said no timetable had been set for selling off the Government's share in the bank, adding RBS has shown "responsibility and restraint" in the bonus payouts.

Facing union accusations of turning a "blind eye to price fixing and mis-selling", RBS chief executive Stephen Hester - who has already waived his bonus for 2012 - said its staff were "badly needed" to help turn the bank around.

But he admitted 2012 had been a "chastening year".

"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," he said. …

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