RBS admits not all staff worth bonuses

Sir Philip Hampton, chairman of Royal Bank of Scotland which is 84% owned by the tax-payer, said it was difficult to cut pay and bonuses as it would mean his best staff would go and work for his competitors.

Speaking at a conference about restoring trust in the industry at London's Mansion House yesterday, Sir Philip said: "I'm sure that we're paying many people who aren't worth it - maybe that's the issue.

"We see people who are worth a lot of money (to us), who when they leave take a lot of business with them.

"If you are the bank that decides to cut bonuses for the most important people, you'll be the first with a franchise-destroying decision."

Sir Philip said the only way to solve the problem of extravagant pay and bonuses within the industry was through regulation.

He added: "My own view is it can probably only be decisively solved through regulation."