The Bank intends to pay about £340m in bonuses to employees in 2017, even as it prepares to announce one of its biggest annual losses in 2016.
The state-backed Royal Bank of Scotland (RBS), which has been facing business losses for a few years, is still seemingly trying to keep its employees motivated and engaged, as it seeks approval for the bonuses to be paid for year 2017. The bank is apparently planning to pay about £340m in bonuses to employees, even as it prepares to announce one of its biggest annual losses since 2008.
The bank, of which 72 per cent is owned by the government, has put forth the proposal for the bonus payouts for 2017 to UK Financial Investments (UKFI), which manages the taxpayer’s stake in the bank.
Although the amount is yet to be formally approved by ministers, given the go-ahead, this would still be the ninth year in a row that bonuses at the bank have fallen.
The bonuses distributed by the bank were at their peak in 2008 when it awarded a sum of £1.4bn in bonuses to employees. It was even caught in controversies owing to its bonus payouts, despite losses, as staff bonuses were nearly £1 billion, even though RBS reported losses of £1.1 billion for 2010.
A majority of the Bank’s shares are now owned by the UK government, which bought RBS stock for £42 billion.
With a ninth consecutive annual loss about to be announced, the declining pay pool reflects RBS’ retrenchment from higher-paying investment banking activities as well as a regulatory clampdown on the way bankers are compensated.