The Royal Bank of Scotland is set to pay out £250m in bonuses to staff at its investment banking arm this year.
The FT reports the money will go into the division implicated in the Libor rigging scandal with RBS expected to face fines of around £500m in the coming weeks.
Last year the state-owned lender faced a political backlash after awarding chief executive Stephen Hester a £1m bonus, which he later gave back.
Labour Treasury select committee member Pat McFadden told the FT there will be “enormous anger if UK taxpayers pick up the tab for the individual sins of traders who were trying to rig Libor rates”.
The paper reports that RBS is cutting the overall bonus pool and enforcing tougher clawback rules.
Its total payouts are expected to be more than a third lower than last year’s £390m total and a fraction of rivals’ payouts. However this year’s bonus budget will not be directly comparable because the bank has moved international staff into another division.