RBS reports £3.5bn loss for 2014

UK state-owned bank RBS has reported a loss of £3.5bn for 2014, down from a £9bn loss the previous year.

The results were hit by a £4bn writedown on the sale of its US business, Citizens.

The bank's chief executive Ross McEwan confirmed he would not receive a bonus this year.

But RBS will still pay out bonuses from a pool of £421m, which is some 21% smaller than in 2013.

'Fair pay'Continue reading the main story

The bank is 79%-owned by the British taxpayer after a government-led rescue in 2008.Speaking on the Today programme he described it as "fair pay" and said it was necessary to pay bonuses to attract people to carry out "fairly technical jobs."

Chancellor of the Exchequer George Osborne has written a letter to the new chairman of the bank, Howard Davies, saying he expected the bank not to give bonuses to senior executives.

He wrote: "I would also expect that, as in the past, no executive directors or members of the executive committee will receive bonuses, despite improved profitability."

"Given the extraordinary support it has enjoyed in the past from taxpayers, I know you recognise that RBS must remain a backmarker on pay and continue to show responsibility and restraint."