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RBS reports £2bn loss in 2011, fourth since bailout RBS doubles annual loss in 2011, fourth since bailout
(40 minutes later)
The Royal Bank of Scotland has reported its fourth year of losses since the bank's bailout in 2008.The Royal Bank of Scotland has reported its fourth year of losses since the bank's bailout in 2008.
The bank posted an attributable loss of £2bn in 2011, up from a loss of £1.1bn in 2010.The bank posted an attributable loss of £2bn in 2011, up from a loss of £1.1bn in 2010.
In reaction to the annual results, Chancellor George Osborne said RBS is "cleaning up the mess after the biggest bank bailout in history".In reaction to the annual results, Chancellor George Osborne said RBS is "cleaning up the mess after the biggest bank bailout in history".
Last month chief executive Stephen Hester turned down his bonus of nearly £1m following political pressure.Last month chief executive Stephen Hester turned down his bonus of nearly £1m following political pressure.
"We all understand that a company that is making losses at the bottom line tests the patience of those who depend on it," he said in the results."We all understand that a company that is making losses at the bottom line tests the patience of those who depend on it," he said in the results.
Last year, the company's share price fell 48% and now stands at around 27 pence.Last year, the company's share price fell 48% and now stands at around 27 pence.
RBS is 82% owned by the state after its £45.5bn bailout in late 2008 at the height of the financial crisis, when it posted the biggest annual loss in UK corporate history.RBS is 82% owned by the state after its £45.5bn bailout in late 2008 at the height of the financial crisis, when it posted the biggest annual loss in UK corporate history.
Before tax, last year's loss was £766m compared with £399m last year. On a pre-tax basis, last year's loss was £766m compared with £399m in 2010. The bank's profitability was boosted in the third quarter of last year by an increase in the value of its debt.
Pay rowPay row
For 2011, RBS said its investment bankers will share a bonus pool of £390m, less than half the amount awarded last year.For 2011, RBS said its investment bankers will share a bonus pool of £390m, less than half the amount awarded last year.
Total staff costs were down 9% to £8.2bn. But while bonuses have halved, basic pay has risen sharply.
The BBC's business editor Robert Peston said that investment bankers account for 12% of RBS' total staff - of 146,800 - and their bonuses were £5,347 on average.
He tweeted: "The bonus element on average investment banking pay of £144,000 at RBS was £22,941, down from £50,114. So average basic pay up 29%."
"I understand people's anger and anxiety about inequalities in pay at a time when the economy is weak and many people are finding things tough," Mr Hester said."I understand people's anger and anxiety about inequalities in pay at a time when the economy is weak and many people are finding things tough," Mr Hester said.
"RBS alone cannot fix these wider issues if we are to achieve what is asked of us commercially. But we have led the way in changing how we pay our people."RBS alone cannot fix these wider issues if we are to achieve what is asked of us commercially. But we have led the way in changing how we pay our people.
The chancellor supported the bank's action on pay.The chancellor supported the bank's action on pay.
"We have made clear that RBS should be a backmarker in the industry when it comes to pay, so it's right that bonuses at the investment bank are less than half what they were last year and less than a third of what they were in 2009," said Mr Osborne."We have made clear that RBS should be a backmarker in the industry when it comes to pay, so it's right that bonuses at the investment bank are less than half what they were last year and less than a third of what they were in 2009," said Mr Osborne.
Two charges were behind the big loss last year.Two charges were behind the big loss last year.
RBS had to set aside £850m to compensate people who bought payment protection insurance they didn't need.RBS had to set aside £850m to compensate people who bought payment protection insurance they didn't need.
It also had to take a loss of £1.1bn on its investments on Greek government debt amid the omgoing eurozone debt crisis.It also had to take a loss of £1.1bn on its investments on Greek government debt amid the omgoing eurozone debt crisis.
Without those charges the co-called core bank, which includes NatWest, made a profit of £6bn - which was down almost 18% on 2010.Without those charges the co-called core bank, which includes NatWest, made a profit of £6bn - which was down almost 18% on 2010.
RBS has been selling off its "non-core assets" to revive its profitability.RBS has been selling off its "non-core assets" to revive its profitability.
The balance sheet has been reduced by more than £700bn from the peak of the crisis, it said.The balance sheet has been reduced by more than £700bn from the peak of the crisis, it said.
The bank also said it had given more than 40 pence in every £1 lent to UK small and medium-sized businesses, which is more than was demanded by government targets, and provided 4,000 business loans each week on average.The bank also said it had given more than 40 pence in every £1 lent to UK small and medium-sized businesses, which is more than was demanded by government targets, and provided 4,000 business loans each week on average.
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.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.
RBS' chairman, Sir Philip Hampton, also gave up £1.4m worth of shares he was due next month.RBS' chairman, Sir Philip Hampton, also gave up £1.4m worth of shares he was due next month.