ROYAL Bank of Scotland has unveiled losses of £2billion and paid staff nearly £1bn in bonuses.

RBS, which is 82% state-owned after receiving a £45.5bn bailout at the height of the financial crisis, paid £785million in bonuses last year, including £390m for its 17,000 investment bankers.

While the total pot is 43% lower than the previous year, it follows a period in which the taxpayer-backed bank announced thousands of job cuts and chief executive Stephen Hester waived his £963,000 all-shares bonus amid a fierce row over bankers’ pay.

Unions said the sizeable payout would “infuriate the workforce” while shadow business secretary Chuka Umunna said the Government had failed to ensure pay restraint as the bank’s biggest shareholder.

Despite the £2bn loss, underlying figures showed some promise for the bank, triggering a 3% rise in shares, with core operations – or the ongoing bank – reporting profits of £6bn, while bad debts were slashed by 20% to £7.4bn.

RBS said it had exceeded its lending targets, including to small businesses, agreed between the top five banks and the Government last year.

Mr Hester went on to warn the current pay row was “damaging” the bank’s potential success which was in everyone’s interests.