RBS posts £3.6bn loss for 2009
Updated on 25 February 2010
As troubled bank RBS announces pre-tax losses of £3.6bn for the year to 31 December 2009, Faisal Islam asks if the bank has managed to explain why paying out over £1bn in bonuses represents value for money.
The bank, which is 84 per cent taxpayer-owned after a number of bailouts, has reported the massive shortfall as it struggles to cope with the effect of toxic debts.
But it could have been worse - earlier figures predicted a loss of £5.3bn.
And the bank is to announce it will pay £1.bn in bonuses to staff.
Commenting on today's figures, Channel 4 News Economics Correspondent Faisal Islam writes: "RBS have done a good job, for them, of explaining why paying out over £1bn in bonuses as the most bankrupt bank in the world represents some sort of value for money. But I’m not sure the public’s going to buy it.
"Perhaps the most eye-catching number, though, is the suggestion that bad loans have peaked. They’ll be crossing their fingers that we don’t relapse into a double dip.
"I doubt the public’s 84 per cent stake is likely to be reduced any time soon."
Royal Bank of Scotland chief executive Stephen Hester is expected to waive a rumoured £1.6m bonus, following widespread criticism of the bank's controversial reward plans. But the government will gain £208m in bonus tax from a £1.3bn remuneration pot.
Mr Hester has said the bank had "exceeded all the principal milestones" set for the first year of its turnaround plan.
His decision not to take his bonus allocation comes after Barclays top bosses also said they would decline their right to payouts.
The RBS chief is in the midst of a five-year turnaround plan to restore the bank to health after taking on the job at the height of the financial crisis.
His remuneration package could reach £9.7m - which he has said even his parents think is too much - based on his efforts to restructure the bank as well as its profitability.
RBS is understood to still be in talks with UK Financial Investments (UKFI) - the body that manages the Government's stakes in bailed-out banks - over the overall size of its bonus pot.
Barclays has already announced record profits of £11.6bn for 2009.
