Banks defer bonuses in return for extra £40bn - papers

Royal Bank of Scotland (RBS) and Lloyds have both agreed to defer bonuses in return for an additional £40bn of taxpayers' money as part of a deal with the Government that will break up two of Britain's biggest lenders.

In return for receiving billions of pounds more of taxpayers' money, the Treasury said that both banks will not pay cash bonuses for 2009 to any staff earning more than £39,000 a year while the board of each lender will defer bonuses due for this year until 2012. Stephen Hester, the chief executive of RBS, who took over the role from his disgraced predecessor, Sir Fred Goodwin, said today: "That does mean we will be making extensive use of deferred payments and payments in shares. See story...