The winners at the Royal Bank of Scotland yesterday were several hundred investment bankers whose contracts gave them the right to bumper bonuses at rates set during the banking boom.

These bankers, many taken on from ABN-Amro when it was bought by RBS in 2007, will still take home six-figure bonuses while the remainder of the bank's 177,000 staff tighten their belts.

As a result of contracts that stipulate that they must be paid guaranteed cash bonuses, they will still share £175million despite the bank's £20billion taxpayer-funded bailout.

Ordinary branch employees at RBS, however, will lose their bonus pots after the bank announced that its staff bonus scheme, which equated to 10 per cent of salary, will also be abolished. These staff, who earn an average of £18,979, will get a one-off 10 per cent pay rise this year to compensate for the loss of their bonuses.

RBS said yesterday it had reached a pay agreement with the union Unite for staff on the deal.

The cash bonus pool available to RBS for payouts this year is just 10 per cent of what it handed out last year. RBS has also agreed to cancel cash bonuses for its highly paid City executives. Executives will be paid deferred discretionary bonuses in the form of RBS bonds, which could end up being worth little if the bank's financial position deteriorates further.

It also said that there would be a pay freeze in 2009 for directors and executives worldwide, for most staff in the United States and for those staff in the Global Banking & Markets division. On average, other staff would receive below-inflation rises, it said.

RBS and UK Financial Investments (UKFI), the Treasury division set up to manage Britain's part-nationalised banks, have been in discussions about the bonus round for a month, after the bank asked to be allowed to pay a total of £1billion in bonuses.

UKFI will use its settlement with RBS as a template for a deal with Lloyds Banking Group, which has asked permission to pay a much smaller bonus pot of about £120 million.

Treasury sources said that UKFI is likely to push for a similar deal banning cash bonuses at Lloyds. However, as part of a complex deal on executive bonuses, RBS has secured permission to pay out £600 million in deferred bonuses.

Sir Philip Hampton, the new chairman of RBS, said that in the case of staff essential to the bank's recovery and who might otherwise be at serious risk of leaving, deferred bonuses were justified.

The bonds will not mature until 2020, although staff will be able to sell them as soon as they receive them. The bank will also be entitled to claw back bonuses from bankers whose divisions were shown to be loss-making in 2008.

A source close to RBS said that the bank's strategic review could see further deep cuts among its well-paid investment bankers, which would in turn reduce the £600million bonus pool. The bank will announce the details of its review with its financial results next week.

It has been reported that between 20,000 and 30,000 of RBS's staff face the axe.

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