RBS defies public outcry with £550m bonus pot

The bank is forecast to pay about £550 million in bonuses although the top eight managers, including chief executive Ross McEwan, have already agreed to waive their entitlement.

That decision followed last month’s latest provision to compensate victims of mis-selling which have added to last year’s huge bottom line loss.

But the bonus pot for hundreds of other staff, which is expected to include seven-figure payouts to top investment bankers, is likely to spark another round of public outrage.

The taxpayer-backed lender has agreed the bonus windfall with UK Financial Investments, the body charged with managing government stakes in the banks.

The bank will argue that the bonus pot has been falling, down from £697m in 2012, £785m in 2011 and £1.4bn in 2010.

However, critics say this reduction partly reflects a sharp reduction in the payroll, particularly at its investment banking team which is again expected to bear the brunt of the latest jobs cull.

Mr McEwan will today outline his well-trailed strategic review, widely expected to mean substantial job cuts.

He will not put a precise figure on the total although it is thought that as many as 30,000 will be axed over three years.

These, however, will include more than 20,000 that will be removed from the RBS payroll when its US bank Citizens and UK retail subsidiary Williams & Glyn are offloaded next year.

There have been reports that the bank will withdraw from many of the 38 countries in which it operates, although sources say no figure will be put on this plan either. Following the fateful 2007 acquisition of Dutch bank ABN Amro the bank operated from 53 territories and this downsizing to a UK-focused retail bank will continue.

Mr McEwan is likely to give his verdict on the group’s troubled Ulster Bank subsidiary, which has been put under the microscope as part of the group-wide review.

He said in a video posted on the company’s website last week: “My aspiration is not to run the world’s biggest bank. My aspiration is to run the best bank in the UK – nothing to do with size.

“A lot of our costs are old costs related to a big global group that we are not any more.’’

The bank’s full-year results will lay bare the scale of the turnaround job that lies ahead and will come in stark contrast to the fortunes of fellow bailed out player Lloyds Banking Group, which returned to bottom line profit for the first time in three years in 2013.

RBS, which is 81 per cent owned by the UK government, stunned the City last month by revealing a string of scandal-related financial charges worth more than £3bn.

Its latest round of provisions include £1.9bn to cover mainly US action over mortgage-backed financial products, an extra £465m to payment protection insurance (PPI) compensation and another £500m for mis-selling of interest rate swaps to small businesses.