Recruiters are predicting high-profile departures at Royal Bank of Scotland following the UK Government’s announcement that, under the terms of Project Merlin, up-front cash bonuses should not exceed £2,000 at state-owned banks.

The Treasury's pact with the banking sector is particularly restrictive for institutions bailed out by the taxpayer, and means pay packets at Lloyds Banking Group and RBS are likely to be a fraction of what is offered elsewhere.