£3.5bn loss as RBS boss forgoes £1m

Thursday 26 February 2015

Royal Bank of Scotland racked up another big annual loss today as it confirmed its chief executive is to forgo a £1 million slice of his pay packet.

The group, which is 80% owned by the taxpayer, posted a deficit of £3.5 billion, although this is down on the £9 billion reported a year earlier. RBS also confirmed that Sir Howard Davies, the former head of the now defunct Financial Services Authority, will be its chairman from September. He replaces Sir Philip Hampton, who is set to join GlaxoSmithKline.

The company's bonus pool was cut by 21% to £421 million for 2014, while chief executive Ross McEwan said he will not take a £1 million "role-based" incentive, which is paid on top of salaries by some banks.

Mr McEwan also declined to take an annual bonus last year.

In a letter to Sir Howard, Chancellor George Osborne called on the new chairman to ensure the bank's business is "conducted to the very highest ethical standards".

He wrote: "Given the extraordinary support it has enjoyed in the past from taxpayers, I know you recognise that RBS must remain a backmarker on pay and continue to show responsibility and restraint."

Since its rescue from the brink of collapse in 2008, RBS has focused on offloading many of its foreign and investment banking assets to become a more UK-focused bank centred on retail and commercial banking.