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Tuesday 08th of December 2009
December 6, 2009    

RBS bankers join rival firms over bonus row

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by Kay Murchie

According to The Sunday Times, over 1,000 investment bankers have left the Royal Bank of Scotland (RBS) after a heated row with the Treasury over bonuses.

The investment bankers account for less than 5% of staff in the bank’s investment division and comes as the Government plans to veto bonus payments at the bank.

The bank said it was planning bonuses of £1.5 billion to staff in its investment arm for its performance in 2009.

Last month, the Chancellor announced that the Treasury, as the major shareholder in the bank, would have the “right to consent” to how much the bank pays in bonuses and how they are paid.

The bank, which is currently 70% owned by the taxpayer, is soon to be 84% owned under the Government’s Asset Protection Scheme (APS), which insurers against losses arising from toxic assets.

One of the conditions of participating in the scheme was to hand over control of its bonus pot to the Treasury.

Meanwhile, according to The Sunday Times, the traders and corporate financiers which have been lured away are estimated to have earned nearly 8% of the bank’s 2008 income.

Barclays Capital, Nomura and Société Générale are reported to be the banks which have tempted RBS staff away.

Bonuses have been a major topic of conversation this year and for RBS, in particular, after Sir Fred Goodwin (former chief executive of RBS) bowed to public pressure and agreed to hand over £4.7 million of his much-talked about £17 million pension.

Sir Fred, and ex-chairman Sir Tom McKillop, were both blamed for the near collapse of the bank.

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