RBS job cuts anger unions as boss set for £10m bonus
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Your support makes all the difference.Royal Bank of Scotland is set for a showdown with unions as it prepares to unveil thousands of job cuts at a time when the body charged with overseeing the taxpayers' stake is in crisis.
The bank axed a further 272 jobs from its UK corporate banking operation yesterday as it emerged that another round of redundancies is being lined up at Ulster Bank.
More than 5,000 jobs are set to go from the investment banking division amid mounting anger among unions, which are furious at the seemingly never-ending series of cuts at state-owned and part state-owned banks. The RBS layoffs are part of plans to cut the operation in half.
Unions' fury will be stoked by the fact that a multi-million pound bonus is likely to be paid to RBS chief executive Stephen Hester, plus as much as £4.3m to John Hourican, who as head of RBS's beleaguered investment banking arm is responsible for shrinking it.
Amid mounting public disquiet over City excess, the Chancellor, George Osborne, told Parliament the Government had bankers in its sights. He said: "I will certainly be talking to management and the board at RBS about bonuses."
Mr Hester has already agreed to defer his payment once – his package could make him £10 million – but he could argue that the money on offer to him and Mr Hourican is part of their contractual entitlements. That would potentially lead to a firestorm as the Government's oversight of the banks in which it has injected more than £60 billion is thrown into crisis with the resignation yesterday of Sir David Cooksey as chairman of UK Financial Investments.
Sir David warned any return on the state's banking holdings – it owns 83 per cent of RBS and 41 per cent of Lloyds – would take far longer than had been hoped. "Disposal of the investments in Lloyds and RBS will inevitably take longer than originally expected, given the challenging economic and banking industry environments both in the UK and globally," he said.
Lloyds and RBS shares would have to more than double for the taxpayer simply to break even, and the paper loss stands at about £37bn.
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