RBS bonus pay rankles some

Feb. 5, 2009 at 7:56 AM
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LONDON, Feb. 5 (UPI) -- The Royal Bank of Scotland, 68 percent owned by the British government, is planning to pay tens of millions of dollars in bonuses this year, sources said.

The bank paid staff $2.6 billion in bonuses in 2007 and, while the checks won't be as large this year, UK Financial Investments, which oversees the government's bank equity, hasn't objected to the bank's bonus schedule, The Times of London reported Thursday.

"There's no blanket objection to bonuses but they are subjecting them to intense scrutiny," one source told The Times.

The bank is expected to post losses of at least $10 billion for 2008, causing some to scoff at the bonus pay.

"Some of these banks are living in the shadows, thinking that life will resume as it was in a few years' time," Commons Treasury Select Committee Chairman John McFall told The Times.

"But life has changed and they need to face up to it. A reality check is required."

"This is a bank that survives only on the basis that the taxpayer is bailing it out. The government's handling of this is increasingly pathetic," Liberal Democrats economic spokesman Vince Cable said to The Times.

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