RBS results follow year of scandal

Feb 27 2013

Taxpayer-backed Royal Bank of Scotland reports annual figures on Thursday after a year of scandal and amid mounting political pressure over its recovery plans.

Fresh from its £390 million settlement for Libor rate rigging, RBS is expected to unveil plans to float its US retail bank Citizens in a deal that could raise more than £8 billion for the lender.

The move would come after regulatory and Government demands to strengthen its balance sheet and concentrate more on the UK.

Chancellor George Osborne told MPs earlier this week he had been forced to intervene and make RBS "focus on UK SME (small and medium enterprise) lending" and give up its overseas ambitions.

His comments follow those of Prime Minister David Cameron, who recently urged RBS bosses to "accelerate" the process of strengthening the company in preparation for its return to the private sector.

But taxpayers are still sitting on a paper loss of around £14 billion as shares remain below the £5 break-even price paid by the Government in its £45.5 billion bailout at the height of the financial crisis.

Last year's results are set to confirm a lengthy road to recovery ahead for the part-nationalised player as experts predict increased bottom-line losses.

Bonuses are also likely to be high on the agenda again, with the bank set to confirm the size of the pool to be shared among staff.

It has already announced that around £300 million will be taken from its staff bonus pot and clawed back from previous awards to help pay for its £391 million Libor fines. The remaining bonus haul is likely to be much less than the £785 million paid out for 2011, which included £390 million for investment banking staff.

Chief executive Stephen Hester said last year he would waive his annual bonus following the bank's IT meltdown, but he is in line for around £780,000 in shares next month as part of a reward scheme for his performance in 2010, which can be cashed in 12 months later.