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The Royal Bank of Scotland has posted a £6.96bn loss for 2016, a sharp rise from the £2.7bn recorded in the previous year.
The bank which is 72 per cent owned by the Government has been hit by £6.7bn 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.
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.”
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RBS is in the midst of a vast restructuring programme, 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.
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