RBS posts £6.96 billion loss
(28 February 2017 – United Kingdom) Royal Bank of Scotland (RBS) reported a sharp rise in losses as higher misconduct charges and restructuring costs underscored the challenges facing the lender nine years after it was bailed out in the world's biggest bank rescue.
The majority public-owned bank, which has not made an annual profit since 2007, booked £6.96 billion (A$11.3 billion) of losses for 2016, against a £1.98 billion loss in the same period a year earlier.
In a statement, chief executive Ross McEwan said: "This is a bank that has been on a remarkable journey. We still have further to go. But the next three years will not be the same as the past three.”
RBS said 2017 will probably be the final year the bank makes a loss as it moves nearer to closing the darkest chapter in its 290-year history, which has seen it rack up more than 58 billion pounds in losses so far.
The lender also announced plans to cut £750 million of costs next year to help offset the challenge of a low-interest rate economy that makes it harder for the bank to make money.
Total income was slightly down, with the jump in losses mainly driven by a £5.9 billion charge of misconduct issues relating to its behaviour in the run up to the 2007-2009 global financial crisis.
RBS took charges to set aside money to cover legal cases in the US where analysts expect it to pay the biggest regulatory penalty in its history for misselling US securities backed by bad mortgage loans.
The bank was the only British lender to fail the Bank of England's stress test at the end of last year.
The British government has indicated that it will not continue selling its 70 percent stake until the bank settles its US fine and resolves its state aid demands.
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