Royal Bank of Scotland is forced to pay large bonuses because it is a “prisoner of the market” chief executive Stephen Hester has told a parliamentary committee.
Facing the cross party group of MPs he said that RBS was paying “the minimum we can get away with in the market place”.
Hester also claimed that that the bank is back on track and would not need any new capital other than that raised so far.
He added under questioning by the Treasury Select Committee: “I believe we have taken all the capital adequacy measure we need to take to deliver our plan.
“We will have one more year of losses and then I hope we will return to profitability.”
The bank chief would not comment on the total bonus pool the bank – which is 84 per cent owned by taxpayers – will pay-out.
But he admitted a “handful” of bankers would be paid cash bonuses “due to previous legal commitments” but all bonuses for those on more than £39,000 would be in shares as is required by the Government.
Hester’s own pay package could be worth up to £9.6m but is depends on RBS shares rising significantly.