Royal Bank of Scotland bankers are set to rake in £500m in bonuses this year, despite the state-backed bank suffering a series of scandals like allegations that it was "killing off" small businesses on purpose in order to seize their property.
The revelation comes just after official figures revealed that City bankers had enjoyed a pay rise of over a third last year, with the top 2,700 now on average pay packets of £1.6m. Others have confessed to be "struggling" to live on salaries as high as £500,000-a-year.
RBS, which is still 82% owned by the taxpayer, was forced to call in lawyers Clifford Chance after a report found that some of its lending practices had driven them into a "financial downfall".
The bank suffered pre-tax losses of £634 million in the third quarter of this year, and is set to make a substantial loss for the whole year. This came as RBS had to shell out a further £250 million to cover compensation for the mis-selling of payment protection insurance (PPI).
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The allegations, from a report written by entrepreneur Lawrence Tomlinson, centre on the bank's "very concerning patterns of behaviour" with the use of its business support programmes, the Global Restructuring Group division (GRG), which is meant to help businesses struggling to pay off their loans.
Speaking to the Huffington Post UK, Tomlinson said: "They’re just taking the business and putting it into or a business support unit, where the business just goes downhill, meanwhile the banks pile on fines, increased rates and monitoring charges and a large accountancy firm to manage it all.”
The Royal Bank of Scotland has also been drawn into a global investigation into allegations of price manipulation of the £3trillion-a-day foreign exchange market.
It emerged that Chancellor George Osborne would not be splitting the Royal Bank of Scotland into a "good" and "bad" bank, leaving the financial institution to create an internal "bad bank" of £38 billion of problem assets. He also tried to protect RBS bankers from having their pay capped at £471,000-a-year by tough new EU rules.
A £500m bonus pool for RBS bankers, as reported by the Daily Mail, would mark a significant drop from the £900m paid out last year.
An RBS spokesman for the bank said: "No decisions have been taken on 2013 pay and any speculation is premature.
"Variable pay has been reformed dramatically at RBS and is now a fraction of what it was before the crisis."
