Stephen Hester ‘extremely pleased’ despite £2bn RBS loss
Stephen Hester
ROYAL Bank of Scotland boss Stephen Hester today said he was “extremely pleased” with the bank’s results despite almost doubling its total annual losses to £2 billion.
The part-nationalised bank revealed overall losses of £2bn for last year, compared with £1.1bn in 2010.
And at the same time it said it was paying a total of £785 million in bonuses to its staff.
RBS, which is 82 per cent state-owned after receiving a £45bn bailout at the height of the financial crisis, said the bonus pool included £390m for its 17,000 investment bankers.
Mr Hester said “The irony of our current situation is I’m extremely pleased with the results despite the fact we have reported a bottom line loss.”
He said RBS had two jobs to do – first, running a huge bank in a very competitive market, and secondly, defusing “the biggest balance-sheet time bomb in history”.
He said the core bank had recorded a profit of around £6bn, but that tackling the “time bomb” meant creating losses.
He said: “Since I started the job in 2008, we have taken out £700bn of bad assets off RBS’s balance sheet.”
Mr Hester said the bonuses RBS was paying to its 17,000 investment bankers had been reduced by 57 per cent to £390m.
The bonus pool for the group as a whole was £785m.
While the total pot is 43 per cent lower than the previous year, it follows a period in which the bank announced thousands of job cuts as it scales back its investment arm Global Banking and Markets.
Last month Mr Hester was forced to waive his £963,000 all-shares bonus amid public outrage over bankers’ pay.
But today he defended the bonuses still being paid.
He said: “The British public need RBS to do an incredible job. We need the best people from around the world to replace the past management team and do their best competing against other bankers.”
He said the alternative was not to have the best people and to run the bank like a government department.
“We might feel better because bonuses would be lower, but we would not get the £45bn back and we would not defuse that time bomb.”
Mr Hester said the bank, which employs 146,800 staff, had frozen the salaries of the 10,000 most senior people.
Mr Hester was appointed chief executive at the end of 2008 to replace Fred Goodwin, who was recently stripped of his knighthood over the collapse of the bank.
Chancellor George Osborne reacted to today’s results, saying RBS was “cleaning up the mess after the biggest bank bailout in history”.
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Comments
There are 15 comments to this article
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allymax
Thursday, February 23, 2012 at 09:25 PMMario. if banks aren't totally bad, as you say, then why has this article been hidden away since I pointed out the Westminster chicanery going on? ....Does Westminster think we're all zipped up the back of the head or something? ....Do they think they are entitled to manipulate the people of the four nations, with completely and purposefully 'b*stardised' reporting, so as to make it look like the banks made a loss, when in fact they made a huge profits; again, to the detriment of the tax-payers of said four nations? ...Does Westminster think we're all imbeciles? ....So why do they treat us a imbeciles then?
Mario Antoinette
Thursday, February 23, 2012 at 08:42 PM13 shareholders. A little bit of both, but strictly speaking, shareholders. Btw Mark i dont work for them. Banks tend to over employ , those employees give a lot of business indirectly to all sorts of other local businesses, Banks give loans to small companies, banks give mortgages to people who wouldnt "own" a home otherwise. Banks arent totally bad you know.
Niebiosa tam sa naprawde nieskrzydlowe ludzie tam
Thursday, February 23, 2012 at 06:31 PMSo, are banks run for the benefit of shareholders, or simply as a fund for the bosses ?
allymax
Thursday, February 23, 2012 at 06:16 PMMark Bishop, RBS made pre-tax profits of 6 billion in the first half of the last trading year; they decided to 'front-end' the profit, and 'back-end' the loss(es), for this year. All-in-all, RBS are at least 4 bill' up on pre-tax profits for the year. .............As far as you owning RBS as a tax-payer, you do not; the Westminster Government own RBS (on behalf of the tax-payer), but we all know Westminster, City of London, and banks are all the same people, as opposed to the pleb tax-payers, of whom are Westminster's enemy. ...Now, RBS are selling stock to raise capitol; what that means, is that they will sell (rumoured to be 20%) stock, garner the money, and pay themselves, (shareholders), exorbitant dividends; we, the peopel, don't see any of that money, all we do is front-up the dosh when the banks lose in their gambling stakes. Guaranteed by Westminster UK government! ...Oh-yeh, one more thing. Westminster recently came out and said they wouldn't be able to get the tax-payers money back from RBS, (and Lloyds), for 'years to come'; now that sounds very much like to me that we are not getting our money back! ....And there it is, folks; Westminster chicanery at its 'sleight-of-hand best'. Can't fool allymax.
Mark Bishop
Thursday, February 23, 2012 at 04:10 PM#8 So why do they keep saying that 82% of the RBS is owned by the taxpayers? Surely I own a little bit of it? Perhaps only one of the pens on the counter? Please pretty please? Despite that perhaps non fact, you must surely agree that it is getting right up peoples' noses that any bonus is even being THOUGHT about, let alone paid. No no and NO. You can think about a bonus when the bank makes a profit and has paid back all its' debts.
Bamboozler
Thursday, February 23, 2012 at 03:21 PMTurning around this bank must be like turning an oil tanker around. They have done very well, but £46,000 each is excessive. A quarter of that would be more acceptable. These people need some encouragement, but not more than twice the countries average annual salary.
Mario Antoinette
Thursday, February 23, 2012 at 02:55 PM7 Its quite common for global corporations (something RBS still is) to use the brand under their control which has the biggest public profile. Many in england still totter along to "their Natwest" , or people in the states wobble along to "their Citizens Bank" because its easier in their mind to have an account with a local bank rather than RBS. You're just the other side of the coin. It actually makes no difference. Would you keep buying Ikea if you realised that the whole thing is a massive Tax Dodge and legally they are infact a Dutch Charity ? Probably. Stop whining.
Mario Antoinette
Thursday, February 23, 2012 at 02:50 PMRBS doesnt have 17,000 Investment Bankers. Thats ludicrous. It probably has that number of people loosely employed in that area of the business most performing non-core functions. The whole tabloid witchhunt thing is getting a bit old. 3 Mark Bishop - unless you are a shareholder you dont actually own any part of the bank , apart from in your mind. I'm a shareholder and I'm far from happy with their performance but I do know that they are heading in the right direction. The Goverment will make a profit once their share is returned to the open market - something most people fail to grasp. I dare say you would refuse a bonus if offered it.
ppink
Thursday, February 23, 2012 at 02:41 PMToday I was informed that, like it or lump it, my account with the Royal Bank of Scotland International is to become a Nat West account. Dave 'keep the Jocks under' Cameron continues...
bonuslesstaxpayer
Thursday, February 23, 2012 at 02:27 PMSo 2 Billion down and almost a Billion paid in bonuses surely all the RBS staff could refuse their bonus and make balancing the books look a bit better after all the RBS wouldn't like its customers behaving in such a manner. Its true what was said on The One Show last night that the bankers know that when it all goes wrong, they know the governments have to step in and bail them out, so they play to that and get bonuses for being bad at their jobs.
HeneageDundas
Thursday, February 23, 2012 at 02:22 PM#4 Nae Answer, mair of your usual negativity and drivel. Don't you get sick of being such a total wally all the time?
.The Answer
Thursday, February 23, 2012 at 01:56 PMscotland the toxic brand!
Mark Bishop
Thursday, February 23, 2012 at 01:38 PMAbsolutely disgraceful. You don't pay bonuses to people for losses. As one of the 82% of taxpayers who own the RBS, I say NO. Pay me back the money my tax bailed you out with. Anyone who is furious with this decision, MOVE YOUR ACCOUNT to another bank or building society. I did.
BillDunblane
Thursday, February 23, 2012 at 01:07 PMWould you no' be pleased if ye were paid his salary?
bvfnkls9fdsa0
Thursday, February 23, 2012 at 11:40 AMComment removed by moderator
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