RBS to pay 1 bn pound in bonuses to staff: Report

LONDON: The RBS is proposing to pay close to 1 billion pound in bonus to its staff, within months of it being rescued by the UK government, while Chancellor of Exchequer Alistair Darling in a different context it would be "wrong to reward failures", says a media report.

According to the Sunday Telegraph "The bank's board has begun discussions about the bonuses with UK Financial Investments (UKFI), the body set up by the Treasury to manage the government's shareholdings in Britain's ailing banks."

The move comes amid Darling's statement in the Sunday Telegraph on his plans for an independent review of the way banks are managed, including the bonus system.

"It would be wrong to reward people whose excessive risk- taking brought the banks down, causing misery to millions of their customers. Success should be rewarded. Failure should not," Darling wrote in the Sunday Telegraph.

The new Chairman and Chief Executive of Royal Bank of Scotland is sensitive to accusations that it is paying "rewards for failure", the report said, adding "Stephen Hester, the new boss, will give evidence to the Commons Treasury select committee on Wednesday, when he is likely to be questioned about the bonuses."

Meanwhile, RBS believes that about half of its "bonus pool" will consist of payments that is contractually obliged to pay and mostly to employees of ABN Amro.