RBS pays out £500m in bonuses despite profit slump

State-owned Royal Bank of Scotland is to payout around £500m in bonuses to its traders and investment bankers, despite a collapse in profits.

The huge handouts - many of which will be worth more than £1m each, according to the Daily Mail - come at a time when politicians and religious leaders are speaking out about corporate excess.

RBS boss Stephen Hester revealed on Friday that the euro bailout fund has hit revenues in the bank's investment wing.

Profits plunged to £112m between July and September from £589m last year.

But the bank's pay pool, from which salaries and bonuses are paid, is still enormous.

It fell from £621m to £527m in the third quarter. Yet for the first nine months of the year, the pot stood at £1.99bn - only marginally lower than the £2.14bn figure from 2010.

Insiders said it would be enough to pay bonuses of just over half the level in 2010, when RBS paid out £950m in bonuses to staff at its casino wing.

Then, more than 100 bankers across the bailed-out group took home more than £1m each.

The government has an 84% stake in RBS but is facing calls to buy up all the shares in order to force the bank to lend more to small businesses which have been starved of credit.