Huge Royal Bank of Scotland losses, a blow to the British taxpayer
RBS shares fall as losses treble in their annual report
by Abi Moses on 24th February, 2017 if ($blog_item->blog_updated_date != '0000-00-00 00:00:00'): ?> and updated 30th November, -0001 12:00am endif; ?>
Shares in Royal Bank of Scotland dropped 2% after the release of its annual report for 2016, reporting huge losses for a ninth straight year.
The lender was bailed out at the height of the financial crisis and remains state-backed, meaning the latest reports represent yet more bad news for the British taxpayer.
Despite claims from RBS boss Ross McEwan that the lender was on its way back to health, annual losses for 2016 we confirmed to be £6.96bn, up from £1.98bn in 2015. Total losses since the bail-out now stand at £58bn.
Mr McEwan is now planning further cutbacks as they aim to return to profit, but with numerous branch closures already applied, experts question how his targeted £2bn cut in costs will be met.
Litigation and conduct costs set aside have accounted for a large proportion of their losses, despite the PPI scandal starting to wind down, RBS have announced recently that they have set aside an additional £3.11bn for the pending US lawsuit in relation to allegations of the mis-selling of mortgage-backed financial products..
In a statement, Mr McEwan claimed, "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. Legacy issues will take up a decreasing amount of our time and focus."
He continued, by confirming an extra focus will be placed on customers, costs and efforts to return to profit. This would be "a significant step towards being able to start repaying UK taxpayers for their support."
Despite a surge in losses, staff bonuses remained at a similar level to 2015. Bonuses totalling £343m were paid to staff, down just 8% on 2015.
Mr McEwan believes the latest losses reported are "a stark reminder of what happens to a bank when things go wrong and you lose focus on the customer, as this bank did before the financial crisis."
The drop in RBS shares has attributed to a sharp fall in the FTSE on Friday morning. Visit the Spread Betting homepage to see what impact the results have had on global currencies and how you can benefit from the market movements.