/ Money

£500m bonuses to RBS bankers but 1m customers penalised

Illustration of man grabbing dangling carrots

Last week, RBS announced that it will pay around £500 million in bonuses to its staff this year. But with 1 million basic bank account holders restricted from withdrawing cash, isn’t it time to review these payouts?

The state owns 84% of RBS. The same RBS whose profits just plunged – and the same RBS that wants to deny basic bank account holders from using rivals’ cash machines. To me, this just doesn’t add up.

Bankers bonuses never fail to get into the headlines. They are always a controversial issue that polarise opinion and provoke debate. I am not here to judge the rights and wrongs of bankers receiving bonuses, but to come at it from a slightly different angle.

Decisions through a different lens

I would argue that a bank that’s almost wholly owned by the taxpayer has an extra responsibility to act fairly towards its customers.

The simple truth is that RBS wouldn’t be in business were it not for the large bailout it received from the government. In my mind this means that the bank has to make commercial and business decisions through a slightly different lens.

Obviously the bank still has to be a viable commercial entity and make sound business decisions. However, the majority state ownership of RBS means that the decisions it makes will be judged to a different standard.

RBS can’t pick and choose

Let’s take a look at the recent decision by RBS to stop users of basic bank accounts using non-RBS cash machines as an example.

As we discussed recently, basic bank accounts are typically taken out by less well-off consumers – those who can least afford to pay to withdraw cash. Once banks start to pick and choose who can be a part of the bank system the benefits of universality start to break down.

When you then consider that this decision is being made at exactly the same time that the bank is paying out hundreds of millions of pounds in bonuses, the decision is even more maddening.

RBS say that they are running basic accounts at a loss as they pay a charge every time someone checks their balance or makes a transaction at an ATM run by another company. However, they are still able to afford to pay huge bonuses to staff that have contributed to falling profits. I don’t think that’s fair. Do you?


This Government is totally and completely inept when it comes to the allocation of resources. Their mantra is support the rich – hammer the poor.

We need a re-election now,.


I don’t think an election would change anything – who would you be thinking of electing??? Remember it was the wonderful GB first as chancellor and then as PM who was largely responsible for the mess in which we now find ourselves. All senior politicians are in government for just one thing and that is to feather their own nests, and the only way they rise to the top is by constant genuflection to superiors.

Realist says:
18 November 2011

As an account holder, tax payer and (very small shareholder) and retired person I am very much against the bonus culture as presently applied.

Not only are the salaries and perks of the senior executives and the like very (to put it mildly!) high, they are also getting ‘bonuses’ on top for failing to increase the value of the company and make meagre profits for part of the year. This is to the detriment of shareholders, government [taxpayers, pensioners etc.] whilst at the same time the bank is reducing any benefits for account holders and small businesses.

They are probably suffering from years of financial errors (from a bank!) and until they can rectify all that there should be no bonuses and senior remuneration levels cut. If they don’t like then they can leave -they hardly cover themselves in glory- and some new blood will take over.

Until the government are paid back for the bailout (by whatever means – the rest of society should not be second best) and then the share price recovered to at least 50% of what it peaked at and dividends paid ALL bonuses should cease. The same should be the case for Golden Handshakes and Goodbyes!!!

Do your jobs and get your pay.

Yes I am biased and miffed but can you blame me as some of my pension relied upon the banks performance and I am now living in fuel poverty *&^^%$$%


Hi Realist and many thanks for your comment,

With fuel poverty now affecting a quarter of all UK households this is a serious concern.

I’m sure you’ve looked into many different ways of cutting your bills but thought you might be interested in this short guide on other tips to tackle the big energy price rises we’re now facing:




Totally agree with the previous comments – well done – I have personally lost thousands of £’s when the government plunged Lloyds into the pit by forcing them into this ill-conceived “deal” – shares purchased @ £3-4 now worth pennies!!! Bonuses and kick-backs in every direction except the shareholders and pensioners AGAIN!! Used to get a nice little dividend from my Lloyds shares – now – nothing!!!


One of the arguments for paying bonuses is to ensure we attract the best executives to the financial industry in the UK. I am wondering when this theory is going to kick in.


Well said I have often said sack the whole lot and advertise their jobs and bonuses at a quarter of the current wage.


Not for the first time, and, no doubt we will visit this situation again and again. But, under the banner of ‘fair’…. and just by ‘one’ bank? Immediately with just cause the cry goes out as ‘FOUL’ and a list of well placed epithets swiftly follow, could we though examine why the banks [in this case RBS] are doing this, at least we can say they have scored a spectacular ‘own goal’ in the process, we know it cannot make an instant change as they so readily inflict upon everyone else, yet, we can change it.

We know change is in effect – Vickers and so on, so Ring – Fencing will occur. Banks didn’t want it although they agree some form of internal change would be required. After all how do you hide the self-inflicted c**k-up created? The Basel agreements I, II, and III in our mind prove that. Therein they must re-examine their profit engendering efforts from all avenues, including that of the humble bank account. Not those specifically already providing income i.e. overdrafts, packages etc.. but a root and branch revamp on what they want as a bank account that makes money, regardless of any previous ethics/history/fairness of what ‘simple’ banking is all about. They’ve brought the dealers ethos to the front line. A commission for a sale and one for purchase, but is this the investment side of banking taking over, you see no Chinese-wall here.

Retail banking [as such] has had no internal protection – no ring fencing, what we as customers pay in can/could be used at any time to support other activities of a bank albeit some restrictions applied, but in essence this what occurs, has occurred, and in their reasoned minds will continue.

This soon to be change though has also provided the perfect smokescreen of confusion readily promoted by the banks and their trade association. We, you’ve seen it…Dear Prime Minister…Mr Chancellor..We can’t do this…ohhh look how much…and we’ll lose so many jobs!! Meanwhile, at the coalface, and I suspect scripted, we [they] will effect change now by doing this and that..all in the name of our responsibilities. All along, night and day our silent funds continue to be used by them, producing profits for the well being of the bank/s. So the trade-off was, and has been, we will give banks our money for safe keeping knowing full well they can use it when we can’t but we will be able to get it out when and where we like, in full. No Excuses. No Charges.

The distaste continues for the onlooker and account holders. And here comes the own goal… when RBS announced the restrictions on usage of ATM’s, it advertised account holders would be able to use the Post Office (somewhat a sugar coated pill) failing to say it applied to Debit Card holders only…..and closed their Basic Bank Account to new customers. AND as aside to this, they also want to re-negotiate payment for ATM usage by their Not-For-Profit-Organisation’s customers, ‘customer card holders’ in Scotland.

Invariably the elderly, and vulnerable suffer by these draconian impositions, something out of Dickens, but if this footprint is set in stone by the bigger and biggest in banks the rest will surely follow. Banking is, in the UK, one of do as I say not as we do with some reluctant justification thrown in for good measure. When you add the ending of traditional cheques in favour of Cash Cards and online banking, the closure of rural branches – both banks and Post Offices, local buses increased fares, transport costs everywhere……you get the picture, the word ‘fair’ pales.

No…FAIR it is not. NEVER. Moreover, is it reasonable? Better still, is it un-reasonable? Nothing is ever fair, antics like gross salaries in the face of meltdown elsewhere borders on criminality to right-minded thinking people. Banks, well we are going to be stuck with them. Reform, long time coming and we will be stuck with that unless we modify that reform to be constructive for everyone. One simple assertion, all of us needs some form of banking facility. RBS have no wish to provide it, but they have done and should return to doing so, end of. Wherein they [RBS] and others can’t see the wood before the trees, perhapsnthey should understand this, you cannot de-construct the very origins and principles of implied trust and banking in one fell swathe. Changes will effectively be underscored by legislation.

Fundamental change to protect the vulnerable indeed, all sectors of society, begins by making it mandatory to have Basic Bank accounts WITH Cash Card access FREE everywhere. By all means we can have other types of accounts, that is competition and based upon individual circumstances, but since banks refuse en-mass to put the foundations in place we must rescue the situation ourselves. Would you all like to read http://thenomoreexcuses.blogspot.com It is totally apolitical. It also has the E-petition http://epetitions.direct.gov.uk/petitions/15120 to get the debate, to get this current Government to enact change.

You do not expect bankers to agree, do you? Well RBS? Fair….? No More Excuses!


RBS pays bonuses to staff who generate revenue for the bank, often traders with a high level of skill and expertise whom it wishes to retain so that they will make further profits for the bank. RBS i