The Royal Bank of Scotland, Britain's biggest government-owned lender, has announced a significantly larger than expected full-year loss. The bank said the net loss for 2011 was £2bn, compared to £1.1bn in 2010. Analysts quizzed by Bloomberg had expected the figure to be about the same as the previous year.
The figures for 2011, in a Bloomberg report, were said to be after writing off Greek debts and compensating customers in the wake of the PPI scandal. PPI alone was believed to have cost the bank £950m. Meanwhile, the BBC confirms this is RBS' fourth straight year, since the bank's bailout in 2008.
The Royal Bank of Scotland is 82 percent owned by the state after a £45.5bn bailout in 2008. In the wake of that crisis, it was also revealed that Stephen Hester, the former chief executive, had shrunk the bank's assets by more than £600bn and cut more than 35,000 jobs.
Despite the huge losses, there is speculation the bank could award bonuses as high as £400m (and rising to £800m). There are also reports the bank will freeze salaries of approximately 10,000 employees, citing the need to cap basic pay in order to control costs. The cap is expected to come into effect from April and is applicable to everyone from the board level to senior managers.