viewNatWest Group

RBS slides to £8.2bn loss; defends £576mln bonuses


Royal Bank of Scotland (LON:RBS) seems set for another row over pay as bonuses came in higher than expected despite an annual loss of £8.2bn.

It was the sixth loss in a row for the troubled bank and a near £3bn rise on 2012’s deficit.

Despite this, the UK taxpayer–owned bank said it will pay staff an additional £576mln, of which £237mln will go to employees at its troubled investment bank arm.

Heavy cutbacks at the investment meant the actual bonus pay-out was 15% lower than last year and chief executive Ross McEwan, who also unveiled plans to slim the business down from seven units to three, again defended the need to pay well to keep its best staff.

"I know it's a highly emotional issue but I need to pay these people fairly in the market place to do the job. We have been a back-marker on pay but I have to make sure we are there or thereabouts," he told a conference call.

Huge write-offs accounted for most of the losses, with RBS taking a £3.8bn hit for regulatory and redress provisions and £4.8bn for the cost of setting up an internal bad bank.

Stripping those out, operating profits fell by 15% £2.5bn with Retail & Commercial down 4% to £4.1bn with lower income in UK Corporate and International Banking offsetting improved impairments in Ulster Bank, while the contribution from Markets was 58% lower at £638mln.

Quick facts: NatWest Group

Price: 188.05 GBX

Market: LSE
Market Cap: £22.81 billion

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