ROYAL Bank of Scotland boss Stephen Hester today said he was “extremely pleased” with the bank’s results despite almost doubling its total annual losses to £2 billion.
The part-nationalised bank revealed overall losses of £2bn for last year, compared with £1.1bn in 2010.
And at the same time it said it was paying a total of £785 million in bonuses to its staff.
RBS, which is 82 per cent state-owned after receiving a £45bn bailout at the height of the financial crisis, said the bonus pool included £390m for its 17,000 investment bankers.
Mr Hester said “The irony of our current situation is I’m extremely pleased with the results despite the fact we have reported a bottom line loss.”
He said RBS had two jobs to do – first, running a huge bank in a very competitive market, and secondly, defusing “the biggest balance-sheet time bomb in history”.
He said the core bank had recorded a profit of around £6bn, but that tackling the “time bomb” meant creating losses.
He said: “Since I started the job in 2008, we have taken out £700bn of bad assets off RBS’s balance sheet.”
Mr Hester said the bonuses RBS was paying to its 17,000 investment bankers had been reduced by 57 per cent to £390m.
The bonus pool for the group as a whole was £785m.
While the total pot is 43 per cent lower than the previous year, it follows a period in which the bank announced thousands of job cuts as it scales back its investment arm Global Banking and Markets.
Last month Mr Hester was forced to waive his £963,000 all-shares bonus amid public outrage over bankers’ pay.
But today he defended the bonuses still being paid.
He said: “The British public need RBS to do an incredible job. We need the best people from around the world to replace the past management team and do their best competing against other bankers.”
He said the alternative was not to have the best people and to run the bank like a government department.
“We might feel better because bonuses would be lower, but we would not get the £45bn back and we would not defuse that time bomb.”
Mr Hester said the bank, which employs 146,800 staff, had frozen the salaries of the 10,000 most senior people.
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.
Chancellor George Osborne reacted to today’s results, saying RBS was “cleaning up the mess after the biggest bank bailout in history”.