Royal Bank of Scotland PLC, which accrued the largest corporate loss in British history last year, is making the argument that it needs to compete for high-price talent in order to become a profitable-enough bank to repay the governments $75.8 billion bailout.
In a shareholder letter last week, RBS complained of the “onerous” terms for participating in the British government’s toxic asset insurance scheme, including having to grant majority shareholder and government agency U.K. Financial Investments “the right to consent to the quantum and shape of the 2009 bonus pool.”
RBS hasn't given any specific numbers, but published reports suggest the bank is looking to set aside $2.5 billion to be distributed as bonuses, up from nearly $1.7 billion a year ago.
RBS has been painted as the main antagonist of the banking crisis, having already eliminated 20,000 jobs, 14,000 in Britain. Fred Goodwin, its former chief executive, left with a pension of 703,000 pounds annually after leading RBS on a ill-fated expansion that ended in the catastrophic takeover of Dutch bank, ABN Amro—write-offs on the final deal helping increase RBS’ 2008 losses to a U.K. Record of $40.1 billion.
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