Taxpayer-backed Royal Bank of Scotland has announced a full year loss of nearly £2bn - further fuelling the debate about bankers' pay and bonuses.
The bank, which is 82% owned by the state, posted a pre-tax loss of £766m for 2011 and a total loss of almost £2bn, which includes various accounting and tax charges.
The bank said "several large one-off items" accounted for the loss, including a near-£1bn hit for mis-sold payment protection insurance compensation.
Greek sovereign debt impairments and restructuring costs also played a part.
The figure compares to total losses of £1.1bn in 2010.
The bank will pay out £785m in bonuses to all its staff, with £390m going to RBS's 17,000 investment bankers.
The average pay out to an investment banker will be £23,000, although some will get nothing and many of the awards will be much higher.
The total bonus pool, revealed exclusively a day earlier by Sky News City editor Mark Kleinman , is a 43% reduction on last year.
Mr Kleinman said: "The reduced bonus numbers for RBS's investment bank represents a cut of about 60% on last year's pot of £950m.
"RBS argues that this demonstrates restraint amid intense criticism of City pay."
RBS has been at the centre of a growing row over bankers' pay, which led to chief executive Stephen Hester waiving his £963,000 bonus several weeks ago.
In a statement that has accompanied the latest results, Mr Hester wrote: "We have three jobs at RBS - to support our customers, to defuse our legacy risks and to rebuild a successful profitable bank.
"In 2011 we showed results aross all three goals, though with much still to go."
The lavish bonus culture amid economic austerity follows a period in which the bank announced thousands of job cuts as it scaled back its investment arm Global Banking and Markets.
Staff costs decreased by 9% in 2011.
In a letter to shareholders RBS chairman Sir Philip Hampton wrote: "I understand people's anger and anxiety about inequalities in pay at a time when the economy is weak.
"RBS alone cannot fix these issues if we are to achieve what is asked of us commercially."
RBS, which employs 146,800 staff, received a £45.5bn taxpayer bailout at the height of the financial crisis in 2008.
In January, RBS former chief executive Fred Goodwin had his knighthood stripped over his role in the bank's near-collapse.
RBS and its rivals have been hit by volatile financial markets, eurozone debt woes, weak consumer confidence at home and reforms to banking regulation and law, such as forcing banks to separate their retail and investment banking arms.
Chancellor George Osborne supported the bank's move to reduce investment banker bonuses.
He said: "The new management team at RBS are cleaning up the mess after the biggest bank bailout in history, just as the Government is cleaning up the system of bank regulation that failed so badly.
"These results show that they are doing just that.
"We have made clear that RBS should be a backmarker in the industry when it comes to pay, so it's right that bonuses at the investment bank are less than half what they were last year and less than a third of what they were in 2009.
"But our main interest should be to get back as much money as possible for taxpayers and we must not let those that want to create an anti-business culture put that at risk."
Deputy prime minister Nick Clegg told Sky News that RBS investment banker bonuses were "going in the right direction of travel."
He added that he would "like to wave a magic wand" to sort out the UK's banking system, but it was "a long term programme" of making sure banks limit bonuses, pay greater taxes and lend more to businesses.
RBS shares are worth around £20bn less today than when the bank was rescued by the Government.
Despite a 40% rise in the share price in recent weeks, RBS needs shares, which are currently trading at about 28p, to rise to 50p before the taxpayer can break even.
The Unite union reacted angrily to the bonus announcement, saying it was not being distributed evenly among the workforce.
David Fleming, Unite national officer, said: "If RBS split the massive bonus pot it is awarding its investment bankers between the 60,000 average bank workers, they would have a real opportunity to pay their household bills and change the life of their family.
"It beggars belief that this 82% taxpayer-backed institution is imposing a pay cut on its hard-working frontline staff, while continuing to pay the City bankers ridiculously large bonuses."
Read more on bonuses
:: RBS chairman Sir Philip Hampton claims in a Sky News documentary with Jeff Randall that the era of big banking bonuses is over
:: A YouGov poll for Sky News shows 75% of people believe that bosses at Britain's state-backed banks should not receive bonuses
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