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RBS chief gains second bonus for fast work
Fred Goodwin, the chief executive of Royal Bank of Scotland, is to receive an extra bonus this year after completing the integration of NatWest four months early.
The payment, the size of which will be revealed in the bank's annual report next month, comes after 75,000 staff involved in meshing together NatWest and Royal Bank shared in a £100m special bonus last year.
As Royal Bank reported a 12% rise in pre-tax profits to £6.4bn, Mr Goodwin said the two banks had completed their three-year integration plan - which has cost 16,000 jobs - by November rather than by March as scheduled.
Staff also received performance bonuses related to profits that, combined with the integration bonus, amounted to £300m.
Mr Goodwin ruled out big acquisitions in continental Europe but admitted the bank would seek opportunities in Britain and particularly in the US. He admitted that any UK deal was likely to be small. He indicated a more sizeable transaction was likely in the US after Royal Bank bought Mellon last year to add to its Citizen's operation in New England.
Mr Goodwin produced statistics showing Royal Bank had achieved a 52% increase in its income to £5.7bn since it took over NatWest three years ago. "We've grown an Abbey National in the last three years," he said, quickly adding Royal Bank had not picked up any of Abbey's other problems along the way. Abbey reported a near £1bn loss this week.
He was at pains to show that 70% of the growth had been achieved organically, rather than purely as a result of the acquisition of NatWest, which it won after a takeover battle with Bank of Scotland, or other deals in the US.
The Edinburgh bank reaffirmed its commitment to the NatWest brand, which is in the process of getting rid of its black and white logo and replacing it with a blue and red design, more like the one used by Royal Bank. The bank is fitting out 120 of NatWest's 1,700 branches a week with the up-to-date look.
It took a provision against bad debts of £1.2bn up from £984m a year ago, which it said reflected its increase in overall lending but also "a number of specific corporate situations".
Its shares fell by 5p to 1,393p but analysts said the figures were strong, despite the higher bad debts figure. "They delivered a solid set of results," said John-Paul Crutchley, analyst at Merrill Lynch.
In addition to NatWest, Royal Bank also owns the Direct Line insurance business and provides banking services for customers of the Tesco supermarket chain.
Fred Watt, the finance director, said the company would soon have more capital once it had finished making special payments to former NatWest shareholders.
Overall, its final dividend is 31p, taking the full year payment to 43.7p, a rise of 15%.