RBS has reported a pre-tax loss of £3.6bn for the past financial year, but is still set to pay out £1.3bn in bonuses to its investment bankers.
The bank, which is 84% owned by the state, is expected to face criticism after the UKFI, the body which oversees taxpayers’ investment in banks, gave the go-ahead for RBS to pay bonuses despite the fact that it would have collapsed without billions of pounds of public money used to bail it out during the financial crisis.
Chief executive Stephen Hester announced that he would forgo his annual £1.6m bonus earlier this week.
Bosses at other banks, including Barclays and Lloyds, have also declined their bonuses, putting pressure on the HSBC chief executive to do the same.
Philip Hampton, the chairman of RBS, said the bank needed to pay bonuses to retain staff “who are critical to the recovery of RBS”, said the Times.
The company’s investment bank arm, global banking and markets, made a £5.7bn operating profit for the full year, compared with £1.8bn loss in the previous.
RBS is the second big UK bank to report 2009 results. Last week Barclays announced record profits of £11.6bn.
According to the Financial Times, RBS had intended to pay up to £1.7bn in bonuses to its 17,000 investment banking staff, but the figure was reduced after the bank consulted UK Financial Investments (UKFI).