Royal Bank of Scotland reported losses of £1.99bn in 2011, compared with £1.12bn in 2010.

The losses were a result of £850m in costs for payment protection insurance (PPI) mis-selling, £1.1bon on Greek government bonds and what RBS chairman Philip Hampton described as "weak and deteriorating economic and market conditions".

RBS group reported that it cut the bonus pool for its investment bankers by 58% in 2011, to £390mn, which was praiszed by Chancellor George Osborne. "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," he said.

But the FT reported this morning that RBS would be revealing that it boosted fixed pay and benefits in its investment banking division by about a third in 2011 to offset cuts in the bonus pool.