RBS ‘clean up’ plan to push it into 2015 loss

The taxpayer-owned bank is upping provisions for PPI mis-selling and bad loans in the US

RBS to report a loss in 2015 after setting aside more money for mistakes (Corbis)

RBS has said it expects to report a loss in 2015 after embarking on a massive “clean-up plan” that will hit annual profit by £2.5 billion.

The taxpayer-owned bank is upping provisions for PPI mis-selling and bad loans in the US and taking a writedown on its private banking division.

It is also paying £4.2 billion into pensions schemes following an accounting change, while the £500 million to its PPI redress pot comes after a recent Financial Conduct Authority consultation.

That will take a £500 million toll on fourth quarter profit and take its total bill for the scandal, which is to-date the most costly in UK retail banking history, to £4.3 billion.

Meanwhile, a further £1.5 billion spend in connection with US residential mortgage-backed securities litigation claims will reduce attributable profits for the fourth quarter of its 2015 financial year by £1.5 billion.

The impairment charge on its private banking arm Coutts came to £498 million.

Chief executive Ross McEwan said: “I am determined to put the issues of the past behind us and make sure RBS is a stronger, safer bank.”

“We will now continue to move further and faster in 2016 to clean-up the bank and improve our core businesses.”

RBS will announce its results on February 26.