The bank has set record annual pre-tax profits

The bank is making record profits but finance union Unifi claims many staff are not sharing in the firm's success.

It claims 25,000 staff will not get a pay rise to keep up with inflation, with 4,700 getting no pay rise at all.

RBS chairman Sir George Mathewson claimed any staff who were not getting a wage rise were either underperforming or at the top of their grade.

Staff who have not received increases under our approach are staff who are poor performers or those who are paid at the maximum salary scale. Sir George Mathewson RBS chairman

RBS recently announced a pre-tax profit increase of 11% to �7.1bn in 2003.

Chief executive Fred Goodwin received an annual bonus of almost �1m.

Mr Goodwin's �990,000 was part of a total salary and bonus package of �1.9m for 2003, and a reward for the bank's record annual pre-tax profit of �6.2bn.

He also received shares worth about �1.3m.

The union said the huge profits were only benefiting shareholders, but the bank said it valued its staff highly.

The bank's chairman added that its workers were amongst the best rewarded in the country and he was "disappointed" Unifi was protesting.

Disenfranchised and disillusioned

Sir George said staff typically earned about �28,000 a year and that most employees were able to join a free final salary pension scheme.

At the AGM, Rob MacGregor, national secretary for Unifi at RBS, told the board of governors that their pay offer had caused a "sense of dismay among large parts of the workforce".

Mr MacGregor said: "The 2004 pay award amounts to an increase of little more than �1 a week before tax.

"Workers feel disenfranchised and disillusioned as a result of the pay policy, yet you have stated that staff are the key to growth and that they have done everything you have asked of them and more."

Maximum salary scale

Sir George said that salaries to reflect performance and were not based on inflation.

He said: "Staff who have not received increases under our approach are staff who are poor performers or those who are paid at the maximum salary scale."

In his opening statement to shareholders, Sir George said: "Average earnings of �28,400 in RBS are now 10% above the UK average.

"We operate a free final salary pension scheme for the majority of our employees - one seventh of 500,000 employees in this type of scheme, in the UK.