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Banks set to unveil further losses

11:05, Feb 24 2013

 

Taxpayer-backed lenders Royal Bank of Scotland and Lloyds Banking Group will reveal the impact of another year of scandal when they report further big losses.

Left reeling from Libor rigging revelations and an ever increasing bill for mis-selling claims, results from RBS and Lloyds are likely to confirm a lengthy road to recovery ahead for the part-nationalised players.

Barclays has already set the scene with its results earlier this month detailing another £2.5 billion to cover the costs of mis-selling in 2012, which came on top of its £290 million settlement for Libor fixing.

Fresh from agreeing its own settlement for the Libor scandal, RBS is the first to report annual figures next Thursday.

Bonuses are likely to be high on the agenda once more, with the bank set to confirm the size of the pool that will be shared among staff.

It has already announced that around £300 million will be taken from its staff bonus pot and clawed back from previous awards to help pay for its £391 million in Libor fines.

The remaining bonus haul is likely to be much less than the £785 million paid out for 2011, which included £390 million for investment banking staff.

Chief executive Stephen Hester said last year he would waive his annual bonus following the bank's IT meltdown, but he is in line for around £780,000 in shares next month as part of a reward scheme for his performance in 2010, which can be cashed in 12 months later.

Banking analyst Ian Gordon at Investec Securities is expecting compensation provisions for mis-selling to plunge RBS even deeper into the red with losses of £3.9 billion in 2012 - far worse than the £766 million loss reported for 2011.

RBS, which is 81% owned by the State after a £45.5 billion bailout at the height of the financial crisis, disclosed in November that it was taking an additional £400 million in claims relating to payment protection insurance.

 
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