[February 26, 2014]
(Reuters) — Royal Bank of Scotland <RBS.L> has received approval
from Treasury agency UK Financial Investments to pay about 550
million pounds ($920 million) in staff bonuses for 2013, Sky News
reported late on Tuesday.
The news service said the bank is expected to disclose the proposed
bonuses when it announces its annual earnings, estimated at a loss
of about 8 billion pounds.
The bank's Chief Executive Officer, Ross McEwan, is also expected on
Thursday to unveil a strategic review of its investment banking and
international operations in which the group could shed up to a
quarter of its 120,000-member workforce, according to sources who
spoke to Reuters.
The partially nationalized bank is expected to have reduced the 2013
bonus pool by at least 25 million pounds under a commitment it gave
12 months ago to reduce bonuses in subsequent years, Sky said.
British Prime Minister David Cameron last month promised that the
government would use its veto power as an 81-percent shareholder in
RBS to block any rise in overall pay at RBS's investment bank.
Bankers' pay leapt into British political focus ahead of the annual
financial sector bonus season, when the opposition Labour party
called on the government to block any attempt by RBS to pay its top
staff bonuses worth twice their salary.
Under new European Union rules — which are being challenged by
Britain in EU's top court — banker bonuses can be no higher than an
individual's fixed salary, rising to double that level if
shareholder approval is obtained.
Bonus payments remain a sensitive issue as many Britons still blame
banks for the 2008 financial crisis, after which the state was
forced to bail out RBS and Lloyds <LLOY.L>.
Earlier this month Barclays <BARC.L> prompted an angry reaction from
politicians and labour unions after it increased its bonuses by 13
percent to 2.4 billion pounds, even as it announced plans to axe
RBS and UKFI could not be reached for comment outside of normal
($1 = 0.5994 British pounds)
(Reporting by Aashika Jain in Bangalore;
editing by Ken Wills)