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£550m pot for RBS staff despite £8bn loss

Royal Bank of Scotland is expected to reveal a £550 million staff bonus pot today, despite slumping into the red with an expected £8bn loss.

The part-taxpayer owned bank has reportedly agreed the bonus windfall with UK Financial Investments, the body charged with managing government stakes in banks.

It would be less than the £607m haul for 2012, although this is partly expected given the significant headcount reduction in its investment banking team.

The bonus haul will be controversial given the losses expected at the Edinburgh bank and as a strategy review by chief executive Ross McEwan is likely to reveal a major downsizing as the bank refocuses on retail customers, small businesses and larger corporates.

There are fears over large scale job losses as reports suggest its 120,000 strong workforce could be reduced by around a quarter, although much of this is thought likely to come from plans to sell off businesses and exit from many of its riskier investment bank activities, as well as much of its overseas operation.

Mr McEwan will also give his verdict on the group's troubled Ulster Bank subsidiary, which has been put under the microscope as part of the group-wide review.

He said: "My aspiration is not to run the world's biggest bank. My aspiration is to run the best bank in the UK - nothing to do with size."

Meanwhile RBS has also announced it intends to offload its remaining 28.2% stake in Direct Line Insurance Group.

The 423.2m shares are expected to fetch more than £1 billion and be snapped up by institutional investors.

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