Royal Bank of Scotland has reported a steep rise in annual losses but said its staff would receive bonuses of £607 million for 2012.
The taxpayer-backed group posted a pre-tax loss of £5.2 billion for the year to the end of December, up from £1.2bn the previous year, after setting aside a further £450 million in the fourth quarter to redress customers who were mis-sold payment protection insurance (PPI) products. That took its total PPI provision to £2.2bn.
RBS also said its results had taken a £650m hit for expected bills to compensate small business customers who were sold inappropriate interest rate swaps.
The group, which was fined £390m for its role in the global Libor-rigging scandal last month, set aside a multi-million pound bonus pool – including £215m for investment bankers – but said it was recouping £302m for its Libor settlement by cutting the 2012 bonus pot, clawing back from previous years and reducing current year awards.
Stripping out one-off items, operating profits rose 90 per cent to £3.5bn – the highest since its bailout on 2008 – and chief executive Stephen Hester said RBS was taking steps to “become one of the most respected, valued and stable of banks”.
He added: “RBS is four years into its recovery plan and good progress has been made. We are a much smaller, more focused and stronger bank. Our target is for 2013 to be the last big year of restructuring.”
Chairman Philip Hampton said the bank had moved closer to being in a position for the UK government to start selling its 82 per cent stake.
He said: “We have made RBS safer. It is much closer now to being in the good financial health that would allow shareholders to receive a dividend and the government to start to sell its stake.”