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pounds 7bn bank profit `at expense of its staff'.

Byline: By Iain Laing

A record pounds 7bn profit at the Royal Bank of Scotland yesterday sparked calls for bigger pay rises for staff and accusations of making money from its customers' spiralling debts.

The high street giant, which owns NatWest, Direct Line and Churchill Insurance, reported an 11pc increase in profits to pounds 7.15bn during the year to December 31, the 10th year of double-digit growth.

The profit is the biggest in British banking history. It works out at pounds 13,603 a minute, or pounds 226.73 a second. But it is likely to be bettered next month by HSBC, which is expected to post pounds 7.4bn.

The Consumers' Association said the big high-street banks were treating customers with contempt.

A spokesman said: "Competition is not working in banking when the big banks can make such huge profits.

"The big banks must take a large part of the blame for the increased levels of debt. They spent over pounds 1.8bn on advertising last year. People are bombarded by offers of credit, but products are often not very transparent."

Chairman of the House of Commons Treasury Select Committee John McFall said banks needed to do more to promote social responsibility. Chairman of the Scottish Consumer Council Graeme Millar urged banks to give some of their large profits to ease the debt burden on customers.

"Bank customers who are struggling to pay off these debts will have no reason to celebrate today," he said.

Finance union Unifi said RBS should celebrate the huge profit by giving a decent pay rise to its staff.

Under the latest pay offer, about 25,000 workers would receive a below-inflation rise and many would have no increase at all, said Unifi.

Negotiating officer Clare Moody said: "This will be the fourth year in a row that some staff have not had a pay rise. These low-paid staff are effectively subsidising the bank's huge profits.

"No doubt we will see significant increases in the remuneration paid to those at the top of the pile."

RBS chief executive Fred Goodwin said: "I am particularly pleased that in 2003 we have maintained the momentum that has been evident in our results over the last three years."

Mr Goodwin said the integration of high street bank NatWest, which it bought in 2000, was now complete and generating higher revenues than expected.

Total income at RBS rose 14pc to pounds 19.22bn last year despite "adverse external factors" including a Competition Commission inquiry into small-business banking in the UK and also the US dollar's decline.
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Title Annotation:Features
Publication:The Journal (Newcastle, England)
Date:Feb 20, 2004
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