Thousands of top RBS staff quit last year and more are set to leave, the bank’s chief executive has revealed.
Stephen Hester said profits at RBS would have been about £1bn higher if it had successfully retained its employees.
The bank announced it was paying £1.3bn in staff bonuses despite making a £3.6bn loss in 2009.
Hester told the BBC: “We’ve had a small experiment in this respect… some of our best-performing people have been leaving in their thousands.
“The people who left us last year, I believe, would have increased our profits by up to £1bn beyond the ones that we’ve got.”
He said the bank had kept defections to “a damaging but not destructive level” last year, the Evening Standard reported, but “this year is going to a very worrying one for our staff and we will lose a lot more people.
“We now lie at the bottom end of the league table in terms of the incentives we are offering,” he added.
But RBS, which is 84% state-owned, maintained it had “paid the minimum necessary to retain and motivate staff who are critical to the recovery of RBS”.
RBS chairman Philip Hampton admitted a “good number of people” at the bank had received £1m each in bonuses, the Guardian reported.
He said at least 30 of the bankers earning more than £1m were based in London, with the rest working in New York and Asia.
Liberal Democrat treasury spokesman, Vince Cable, said: “Stephen Hester is trying to justify the unjustifiable. Most bankers owe their jobs to the taxpayer. His comments will just reinforce the view of bankers in many people’s minds as greedy and selfish.”
Shadow chancellor George Osborne told the BBC: “[The RBS pay packet] is totally disproportionate to what doctors are paid, people working in industry are paid, teachers are paid, and the like. We need to bring down pay across the sector – not just in one bank, across the sector – and things like a bank tax, internationally agreed, might help do that.”
The bank said it would be paying £208m in bonus tax contributions.