RBS reports £3.5bn loss for 2014

UK state-owned bank RBS has reported £3.5bn loss for 2014, down from £9bn loss the previous year.

The results were hit by a £4bn writedown on the sale of its US business Citizens.

The bank’s chief executive Ross McEwan confirmed he would not receive a bonus this year.

But RBS will still pay out bonuses from a pool of £421m, which is some 21% smaller than in 2013.

Mr McEwan defended the size of the bonus pool.

Speaking on the Today programme he described that as “fair pay” and said it was necessary to pay bonuses to attract people to carry out “fairly technical jobs.”

Chancellor of the Exchequer George Osborne has written a letter to the new chairman of the bank, Howard Davies, saying he expected the bank not to give bonuses to senior executives.

He wrote: “I would also expect that, as in the past, no executive directors or members of the executive committee will receive bonuses, despite improved profitability.”

“Given the extraordinary support it has enjoyed in the past from taxpayers, I know you recognise that RBS must remain a backmarker on pay and continue to show responsibility and restraint.”

The bank is 79%-owned by the British taxpayer after a government-led rescue in 2008.

The bank said it had reduced costs by some £1.1bn and will cut another £800m this year.

It is cutting back its corporate and institutional banking network from 38 countries at the end of last year to 13, which will mainly be in the UK and western Europe.

Mr McEwan said: “What’s really important is that given the success of the last year we want to go further and faster in reforming this bank.”