Government-backed Royal Bank of Scotland on Friday posted a £6.96bn loss for 2016, a sharp rise from the £2.7bn recorded in the previous year, hit by hefty fines and provisions.
The bank which is 72 per cent owned by the Government was hit by £6bn in conduct and legal costs including a £3.1bn provision for mis-selling mortgage-backed securities in the US. It also spent £2bn on restructuring its operations.
RBS has lost more £50bn since it received a £45bn bail out from taxpayers at the height of the financial crisis.
The bank said it would cut £750m of annual operating costs this year by eliminating jobs and closing branches and predicted it would return to profitability in 2018.
Chief executive Ross McEwan said: “The bottom-line loss we have reported today is, of course, disappointing but, given the scale of the legacy issues we worked through in 2016, it should not come as a surprise.
”These costs 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.“
RBS has had a tumultuous few years, marred by fines related to various misconduct scandals.
RBS is in the midst of a vast restructuring of the bank, including asset sales and thousands of job cuts. The bank confirmed it has abandoned plans to sell-off its Williams & Glyn business.
Mr McEwan’s plan to lower the bank’s cost-to-income ratio, a key measure of profitability, to below 50 per cent by 2020 was blown off-course after the Bank of England cut interest rates last year.
Several major banks reported full-year earnings his week with Lloyds reporting its best profits in a decade. Barclays almost tripled its pre-tax profits in 2016 from a year earlier, while HSBC's slumped 62 per cent over the same period.
