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| New RBS chief Ross McEwan to receive no bonus this year or next | New RBS chief Ross McEwan to receive no bonus this year or next |
| (about 4 hours later) | |
| The incoming chief executive of Royal Bank of Scotland will take no bonus for his work in the role this year or 2014. | The incoming chief executive of Royal Bank of Scotland will take no bonus for his work in the role this year or 2014. |
| Ross McEwan, 56, who is currently head of the bank's retail arm, will take up the position in October with a £1m salary. | Ross McEwan, 56, who is currently head of the bank's retail arm, will take up the position in October with a £1m salary. |
| The announcement came as RBS reported pre-tax profits of £1.4bn in the first half of the year. | The announcement came as RBS reported pre-tax profits of £1.4bn in the first half of the year. |
| This was up from a loss of £1.7bn the year before. | This was up from a loss of £1.7bn the year before. |
| However, the bank's shares took a hit as investors voiced their disappointment there had not been further improvements. | However, the bank's shares took a hit as investors voiced their disappointment there had not been further improvements. |
| Shares fell over 5% in early morning trading before recovering slightly. | Shares fell over 5% in early morning trading before recovering slightly. |
| 'Safe and strong' | 'Safe and strong' |
| RBS chairman Sir Philip Hampton said running the bank was among the most challenging jobs in the business world. | RBS chairman Sir Philip Hampton said running the bank was among the most challenging jobs in the business world. |
| "Five years on from its rescue, RBS is now a safe and strong bank," he said. | "Five years on from its rescue, RBS is now a safe and strong bank," he said. |
| "Our focus is now on building a really good bank for our customers and shareholders, returning the bank to private ownership, and playing our full part in supporting the UK economy." | "Our focus is now on building a really good bank for our customers and shareholders, returning the bank to private ownership, and playing our full part in supporting the UK economy." |
| Current chief executive, Stephen Hester, said he had been impressed by Mr McEwan's detailed operational and customer-focused skills. | |
| "He has got, I think, a really good personality, gets on well with people, a sense of leadership but not domination, and one that I think will do the human things of leadership that are needed to be done, well," he told analysts. | |
| Chancellor George Osborne welcomed the appointment, saying Mr McEwan had impressed with his vision of RBS as a strong, UK-centred corporate bank. | Chancellor George Osborne welcomed the appointment, saying Mr McEwan had impressed with his vision of RBS as a strong, UK-centred corporate bank. |
| The bank said Mr McEwan, who joined RBS from Commonwealth Bank of Australia in September 2012, would not take a bonus for 2014 or for the remainder of 2013. | The bank said Mr McEwan, who joined RBS from Commonwealth Bank of Australia in September 2012, would not take a bonus for 2014 or for the remainder of 2013. |
| Any bonus he has earned for his role as head of retail at RBS so far this year will be deferred till 2017, when it will be paid in shares. | |
| Subsequent bonuses will be conditional on Royal Bank of Scotland's share price rising above what the Treasury deems the break-even level for taxpayers' stake in the bank. | |
| Instead of a pension he is set to receive a cash sum each year equivalent to 35% of his salary. | Instead of a pension he is set to receive a cash sum each year equivalent to 35% of his salary. |
| His £1m pay packet marks a 16.7% drop from the £1.2m earned by the bank's current chief executive, Stephen Hester. | His £1m pay packet marks a 16.7% drop from the £1.2m earned by the bank's current chief executive, Stephen Hester. |
| Lloyds contrast | Lloyds contrast |
| In the first half of the year the bank reported a group operating profit of £1.7bn, up 5% from the first half of 2012. | In the first half of the year the bank reported a group operating profit of £1.7bn, up 5% from the first half of 2012. |
| But in what RBS calls its core - the operations that it wants to keep and expand - profits fell from £4.5bn to £3.8bn. | But in what RBS calls its core - the operations that it wants to keep and expand - profits fell from £4.5bn to £3.8bn. |
| The bank was also forced to set aside another £185m pounds to compensate customers for the mis-selling of payment protection insurance, taking the bill for mis-selling to £2.4bn. | The bank was also forced to set aside another £185m pounds to compensate customers for the mis-selling of payment protection insurance, taking the bill for mis-selling to £2.4bn. |
| The RBS profit numbers come a day after Lloyds Banking Group announced it had made £2.1bn in the six months to the end of June, compared with a loss of £456m for the same period last year. | |
| BBC business editor Robert Peston said the RBS numbers showed the bank was much stronger than it was a few years ago, particularly in terms of capital ratios, a key measure of the bank's strength. | BBC business editor Robert Peston said the RBS numbers showed the bank was much stronger than it was a few years ago, particularly in terms of capital ratios, a key measure of the bank's strength. |
| "However, the profit performance isn't as impressive if you strip out funny accounting niceties," he said. | "However, the profit performance isn't as impressive if you strip out funny accounting niceties," he said. |
| "Certainly a little bit of growth this year but that is the contrast between RBS and Lloyds - yesterday we saw significant profits growth at Lloyds but we are not yet seeing that at RBS. | "Certainly a little bit of growth this year but that is the contrast between RBS and Lloyds - yesterday we saw significant profits growth at Lloyds but we are not yet seeing that at RBS. |
| "There is no doubt its retail banking operations in the UK can be a powerhouse again, but the row with the Treasury over whether the investment bank should be expanded or slimmed down has detracted fairly significantly from its operating performance." | "There is no doubt its retail banking operations in the UK can be a powerhouse again, but the row with the Treasury over whether the investment bank should be expanded or slimmed down has detracted fairly significantly from its operating performance." |
| 'Lacklustre figures' | 'Lacklustre figures' |
| Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said RBS' first half figures were "lacklustre" and unlikely to alter investor perception of the stock as one to avoid. | Richard Hunter, head of equities at Hargreaves Lansdown stockbrokers, said RBS' first half figures were "lacklustre" and unlikely to alter investor perception of the stock as one to avoid. |
| "The general view is one of impatience in awaiting the RBS full recovery story when there are perceived to be better opportunities elsewhere in the sector," he said. | "The general view is one of impatience in awaiting the RBS full recovery story when there are perceived to be better opportunities elsewhere in the sector," he said. |
| Announcing his last set of figures before stepping down as chief executive, Stephen Hester was more positive, saying RBS's journey from "bust bank" to "normal bank" was largely done. | |
| "But no small task remains - to harness the energies and strengths that have driven the bank's recovery, and to take RBS towards the target of being a 'really good bank' for customers, shareholders and society as a whole," he added. | "But no small task remains - to harness the energies and strengths that have driven the bank's recovery, and to take RBS towards the target of being a 'really good bank' for customers, shareholders and society as a whole," he added. |
| Doing splits | |
| There has been speculation that the success of Lloyds could soon pave the way for the government to sell its 39% stake in that bank. | There has been speculation that the success of Lloyds could soon pave the way for the government to sell its 39% stake in that bank. |
| However, analysts said the results from RBS, which is 81%-owned by the UK taxpayer, told a different story. | However, analysts said the results from RBS, which is 81%-owned by the UK taxpayer, told a different story. |
| Joe Rundle, head of trading at ETX Capital, called it "a particularly weak performance". | Joe Rundle, head of trading at ETX Capital, called it "a particularly weak performance". |
| "Unlike its peer Lloyds Banking Group, there's little to suggest the government is comfortable with selling down its stake in the bank," he said. | "Unlike its peer Lloyds Banking Group, there's little to suggest the government is comfortable with selling down its stake in the bank," he said. |
| Another issue concerning investors is uncertainty over a potential move to break RBS up into a "good" bank and a "bad" bank. | |
| A draft report from the Parliamentary Commission on Banking Standards has called for the split, which could see poorly performing loans taken onto the government's balance sheet. | |
| The final report is due in September. | |
| Mr Hester told analysts that his job had been to deliver a bank strong enough for the government to feel it had an option on whether or not to proceed with a break up. | |
| "I think the numbers today very clearly demonstrate that it is an option not a necessity," he said. |