London: Even as the British economy
continues to reel under financial turmoil, banking major Royal
Bank of Scotland (RBS) is planning to hand out bonuses of up
to five million pound to its employees, a media report says.
"The average employee in its high-risk investment banking
arm is likely to take home 2,40,000, pound with the top 20
staff in line for payments of between one million pound and 5
million pound respectively," the Sunday Times reported.
According to the report, the bank is planning the said
payout from its total pay and bonus reserve of four billion
pound and the said bonus, when paid, would top even those
awarded by the bank at the time of financial boom.
"The payouts by the investment banking division would top
the deals awarded at the peak of the financial boom in 2007
and are 66 per cent higher than those paid last year," the
report said.
Last October the UK treasury rescued the ailing bank with
an initial injection of 20 billion pound paid out of the
taxpayers money. Taxpayers now hold 70 percent stake in the
bank.
The global financial turmoil took a severe toll on the
UK's banking system, forcing the Government to partially
nationalise entities such as RBS.
"Any suggestion of bumper bonuses will put RBS on a
collision course with UK Financial Investments, which oversees
taxpayers' investments in banks. It would have to approve the
payments," the daily added.
Earlier this year, RBS had drawn flak over its plans to
pay around a billion pound in bonuses to its staff, just weeks
after it was forced to go cap in hand to the government.
The bank has also been caught in a storm for paying a
pension worth 700,000 pound a year to its former chief
executive Sir Fred Goodwin.
Almost a third of the bank's wealth management staff in
Singapore have resigned last week over fears they would
receive lower than expected bonuses, the report said.
"RBS is expected to lobby hard to be allowed to make the
payments, claiming that dozens of its top performing
executives have been poached by rivals offering even bigger
pay deals," it said.
Bureau Report
First Published: Sunday, October 18, 2009, 18:18