Competitive pay essential for bank's success: RBS

Amid the raging controversy over the issue of bankers bonus, the Royal Bank of Scotland (RBS) has asserted that its ability to give competitive pay to the staff is essential for the company's success.

RBS Chairman Philip Hampton noted that the board has to take important financial decisions primarily on a commercial basis.

Speaking at the groups general meeting here today, Hampton pointed out that under the companies act, each director must act in a way that would most likely promote the success of RBS for the benefit of shareholders. "We see our ability to pay competitive rates to our staff as essential to this," he said.

The meeting was mainly convened to approve Britain's bailout plan for RBS. The British government holds a significant stake in the bank, after pumping in billions of pounds to help it fight the financial crisis.

Huge bonus payouts to bankers have attracted severe criticism from various quarters especially in the wake of the financial turmoil. Last week, Britain said it would impose a 50 per cent one-time tax on bonuses worth over 25,000 pounds.

According to Hampton, the board is committed to ensuring that the banking group is commercially viable. "I would like to reiterate that we understand the need to ensure that our policy on pay meets the highest standards and addresses public concerns appropriately. We are also committed to ensuring that we run the group in a commercially viable manner," Hampton said.