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LONDON (Reuters) - Part-nationalised Royal Bank of Scotland confirmed (RBS.L) Chief Executive Stephen Hester will waive his bonus this year following the computer systems failure which caused disruption to millions of its customers.
"I think it's inappropriate for me to have a bonus this year. We have let our customers down," Hester said in an interview with the BBC on Friday.
RBS, 82 percent owned by the government, has struggled to get on top of a huge backlog of failed payments after a software upgrade went wrong last week, resulting in it being unable to process payments for its NatWest, RBS and Ulster Bank personal and business customers.
"That may have arisen from old systems and things that were before my time but I think we could reasonably be expected to have improved things since then and clearly we didn't improve them enough, so it wouldn't cross my mind to have a bonus this year," Hester said.
RBS has operated extended hours at 1,200 of its NatWest branches this week, having opened for business for the first time on a Sunday in its 44-year history and doubled its usual number of call centre staff in an effort to get on top of a huge backlog of missed payments.
RBS is expected to face a bill of 100 million pounds or more as a result of the problem.
The bank could also face a hefty fine from the same interest rate rigging scandal that has hammered Barclays (BARC.L) this week and left its boss Bob Diamond fighting to hold on to his job.
In January, Hester opted to waive his 2011 bonus, which would have been worth almost 1 million pounds, after the handout angered Britons bearing the brunt of austerity measures.
Britain's banking woes deepened on Friday as the Financial Services Authority said it had settled with four major banks, including RBS, after finding evidence they mis-sold products to protect small businesses against a rise in interest rates.
($1=0.6449 British pounds)
Reporting by Matt Scuffham; Editing by Mike Nesbit