RBS profits hit by restructuring and legal charges

The UK Government owns a 73 per cent stake in RBS

Litigation and restructuring cost RBS a combined £976 million in the third quarter (Getty Images)

RBS has said legal costs could be higher than expected after it recorded a third quarter operating loss of £134 million, down from a profit of £1.1 billion the year before.

RBS, which is 73 per cent owned by the taxpayer, warned that the charges, relating to mortgage-backed securities, are unlikely to be accounted for before next year. Litigation and restructuring cost RBS a combined £976 million in the third quarter.

“We still have a number of litigation issues to get through. We’ve dealt with some this year, particularly around foreign exchange, we still have a few more to see through that I’d like to see before the end of this year,” Ross McEwan, CEO of RBS, said.

One of the ways RBS is offsetting losses is by selling its international assets, such as its $2.7 billion stake in Citizens Bank in the US. RBS has said it plans to exit Citizens before the end of the year, which is earlier than expected. RBS said it wants to return its focus to the UK. Shareholders will not receive a dividend until at least 2017, sources at the bank have told the BBC.