Royal Bank of Scotland, the state-backed British bank, recorded a pre-tax loss of 766 million pounds ($1.2 billion) for 2011 Thursday, but said it would continue to pay bonuses.

The Royal Bank of Scotland HeadquartersThe bank, which is 82 percent owned by UK taxpayers, was hit by charges of 850 million pounds for the payment protection insurance scandal in which it mis-sold insurance. It took another 1.1 billion pounds in charges over its exposure to Greece debt. The loss is less than the 1.2 billion pounds forecast by Deutsche Bank. Its core Tier 1 ratio was 10.6 percent, indicating that it should not need to raise more money to meet new European banking regulations. Operating profit for 2011 was 1.9 billion pounds, up 11 percent from 2010. Chief Executive Stephen Hester, who decided to turn down his bonus last month after pressure from politicians and the public, was parachuted in to the bank in 2008 after it was part-nationalized. Since then, 34,000 jobs have been cut and the bank has been refocused on retail banking. Investment bankers were still paid 2.45 billion pounds in 2011 – down 9 percent from the previous year. The total "variable compensation" awarded to investment banking employees in 2011 was 390 million pounds, down 58 percent from 2010. This represented around 23,000 pounds per employee in the investment bank. Total "variable compensation" for the bank's workers was 785 million pounds, down 43 percent from the previous year.Many of
RBS' [RBS-LN Loading... ()
] problems are ascribed to rapid expansion under Sir Fred Goodwin, who left the bank in 2008. The purchase of ABN Amro at the height of the market in 2007 is often cited as the key to RBS’s poor subsequent performance. Barclays has also slashed its bonus pool to around 1.5 billion pounds for its investment bank, although the size of Chief Executive Bob Diamond’s remuneration package has not been announced. Antonio Horto-Osario, Hester’s counterpart at Lloyds, has announced he won’t take a bonus this year. Hester said: “We have three jobs at RBS - to support our customers, to defuse our legacy risks and to rebuild a successful profitable bank. In 2011 we showed results across all three goals, though with much still to do.” Philip Hampton, chairman of RBS, said: “The job of rebuilding the Group is far from complete. The need to address the legacy of losses in a number of businesses means that the Group is not yet profitable.” He added: “I understand people's anger and anxiety about inequalities in pay at a time when the economy is weak and many people are finding things tough. RBS alone cannot fix these wider issues if we are to achieve what is asked of us commercially. But we have led the way in changing how we pay our people.”
![]()
View the original article here
No comments:
Post a Comment