UK taxpayer-backed Royal Bank of Scotland remained at the heart of the row over bankers’ pay today as it unveiled total losses of £2bn (€2.4bn) for 2011 at the same time as paying £785m in bonuses to its staff.

Bailed-out British banks Royal Bank of Scotland and Lloyds will this week fuel fears that it will take years for taxpayers to get their money back.

UK taxpayer-backed Royal Bank of Scotland today announced around 3,500 job losses over the next three years in a bid to downsize its investment banking arm.

Royal Bank of Scotland reported a return to profit in the third quarter as it slashed its bad debts and offset a plunge in income at its under-pressure investment arm.

Banking giant HSBC today said profits were “comfortably ahead” of last year in the first three months of 2010 amid lower toxic debt levels.