Royal Bank of Scotland annual losses balloon to £7bn

Royal Bank of Scotland

For its part, RBS' net loss swelled to $8.7 billion in 2016, compared to just $2.5 billion in the year prior - however, operating profits were higher, coming in at $4.6 billion, besting a street consensus of $3.9 billion, according to a Bloomberg report.

RBS, which was bailed out by the British government following the 2008 financial crisis, posted its ninth consecutive annual loss past year.

RBS was hit with £6bn-worth of litigation and conduct costs during the year, including a £3.1bn provision for mis-selling mortgage-backed securities in the US.

Restructuring costs amounted to £2.1bn as the bank continues to retrench from overseas countries to focus on United Kingdom retail and commercial banking.

McEwan said the latest financial loss was "disappointing" and meant the bank had to go "further on costs and faster on digital", as the group was interacting with customers 20 times more through digital channels than physical ones.




RBS has already had a big boost this week after the majority taxpayer-owned bank confirmed on Monday that it has shelved plans to sell its Williams & Glyn chain, a move which could pave the way for resumed dividend payments in the future, although obstacles remain. The bank plans to reduce its costs by £2 billion over the next four years including £750 million in 2017. "RBS also still needs to settle its ongoing litigations, in our view", the analyst concluded in his research note to clients.

In a preview, analysts at the Share Centre said: "Full year profits are expected to come in around £260m and investors will also be looking for an update on the level of mobile wagers and trading in Australia and the US". The bank's return on tangible equity (RoTE) for the year was negative 17.9%, worsened from a negative 4.7% return in 2015.

Restructuring costs a year ago amounted to 2.1 billion pounds, RBS reported.

Once, briefly, the world's largest bank by assets, RBS is in the midst of a vast, multi-year restructuring of the bank, which includes asset sales, job cuts and wading through a series of legal scandals.

"That may well be the case, there is a decent bank inside RBS struggling to get out, but it's those "one-off items" which pop up with such alarming regularity which keep pushing the bank deep into the red".

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