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Royal Bank of Scotland reports eighth year of losses

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By Euronews  with Reuters
Royal Bank of Scotland reports eighth year of losses

Royal Bank of Scotland has reported an annual loss for the eighth year in a row.

RBS is the Jekyll and Hyde of the UK banking sector

The mostly taxpayer owned lender did lose less money than in 2014 but it was still down 1.97 billion pounds (2.5 billion euros).

Litigation and conduct costs accounted for 3.6 billion pounds (4.5 billion euros). That is money set aside to settle court cases for previous misconduct dating back to the US sub-prime mortage scandal as well as compensating customers for mis-sold payment protection insurance policies.

A further 2.9 billion pounds (3.7 billion euros) went on restructuring costs – including paying off workers as it closes down business in 25 countries.

RBS is the Jekyll and Hyde of the UK banking sector, and at the moment it’s hard to see who is in control,” Laith Khalaf, Senior Analyst at Hargreaves Lansdown, said in a note.

“On the one hand the bank is downsizing, de-risking and cost-cutting, while at the same time conduct charges are playing havoc with overall profitability,” Khalaf added.

Chief Executive Ross McEwan will not take a bonus but his total compensation in 2015 more than doubled to 3.8 million pounds (4.8 million euros) due to the maturing of a long-term incentive plan.

RBS’s weak performance and plunging valuation is not good news for the government, which still owns 73 percent, and was expected to begin selling its stake in earnest within 12 months.

The shares fell over 8 percent at one point on Friday and are currently worth less than half what the government paid for them when RBS was bailed out with public money at the height of the financial crisis.