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RBS hands out £607m Bonus, despite making loss of £5.2bn

The Royal Bank of Scotland (RBS) has reported it handed out bonuses to senior employees amounting to a massive £607m, despite making a pre-tax loss of £5.2bn in 2012.

The bank, which is 82pc owned by the tax payer, made the loss after having to pay huge charges related to the mis-selling of products, as well as accounting. However RBS did reveal that overall business had improved in 2012, and disregarding the mentioned charges, the bank actually made operating profits of £3.46bn, up 1.6bn on the previous year.

This performance has meant that the bank is getting closer to a position which would be attractive for private investors. Chairman, Sir Philip Hampton said: “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”

However, despite any optimism about the health of the bank, the public will be wondering how an institution, of which the vast majority is owned by them, is allowed to make such a huge loss and then spend an extra £607m on bonuses for senior employees.

Sir Philip added the following on the matter: “The bonus situation is toxic for everybody. The rates have been falling very substantially. Our bonuses now in our markets business, which is where all the big bonuses are, are 25pc, a quarter of what they were four or five years ago”.

Amid the public outrage, RBS have continued to defend themselves and their system, and are “trying to rebuild customer service and confidence, but that it couldn’t be done overnight”.

If you have any questions related to this article, or any other financial matter, contact one of our financial advisors whio will be happy to help.

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