The Unite trade union yesterday slammed former Royal Bank of Scotland (RBS) boss, 50-year-old Sir Fred Goodwin’s £650,000- a-year pension as the bank reported a UK record corporate loss of £24.1bn and prepared to sack 20,000 workers.
Unite joint general secretary Derek Simpson said: ‘Fred Goodwin’s pension is a national scandal.
‘He was at the helm when RBS took the decisions which led to the current catastrophe.
‘RBS have announced record losses and thousands of job cuts as a result.
‘The government had to intervene to cut bonuses for the existing staff at the bank but Goodwin is still being allowed to walk away with a platinum pension.
‘There should be an immediate investigation into how Fred Goodwin was allowed to walk away with so much when workers at the bank are facing job cuts and the taxpayer has been forced to bail out this bank.’
The RBS net loss of £24.1bn in 2008 after a massive bailout in the wake of the global credit squeeze, contrasted with a net profit of £6.8bn in 2007.
It was also the first bank yesterday to take advantage of the just announced Asset Protection Scheme (APS), whereby the government agreed to insure £325bn of RBS ‘toxic’ assets (worthless paper).
The group will pay a £6.5bn fee to take part in the scheme.
In return for its participation, RBS will commit to lend £25bn to British consumers and businesses this year and a similar amount in 2010.
But the taxpayer now will cover 90 per cent of losses stemming from such holdings.
‘We owe our continued independence to the UK government and taxpayers and are very thankful for their support,’ said RBS chairman Philip Hampton in a results statement, as Chancellor Darling revealed the government now has an 84 per cent stake in the bank, which still remains under ‘independent control’.
The taxpayer’s stake has been upped from 70 per cent because, on top of the £20bn already poured into RBS, the government yesterday announced a further advance of £13bn of state money, plus £6bn in return for more shares.
Blaming ‘unprecedented turbulence in bank and other financial markets and deteriorating economic conditions around the world’ RBS said it will sell off and withdraw or reduce operations in 36 countries to re-focus activities on the domestic market.
In addition, the group will split into two parts, hiving off its riskier holdings into a ‘non-core’ division of around £540bn of such assets that will be wound down over the next five years.
RBS chief executive Stephen Hester announced plans to cut £2.5bn in costs across RBS by 2011, saying this would ‘regrettably’ lead to more job losses.
He did not give a figure but reports have suggested that up to 20,000 jobs will go.
In morning trade, the share price jumped 27.71 per cent to 29.50 pence on the FTSE 100 index of leading shares.