Another year of restructuring and litigation costs kept RBS firmly in the red, as it shelled out an additional £3.1bn in provisions to the US for its involvement in the housing crisis. In total, it lost £7bn over 2016.
This is the ninth consecutive year of losses for the British bank.
Hargreaves Lansdown senior analyst Leith Khalaf weighed in: “RBS is still paying for the sins of the past, though the bank is now saying that 2017 is going to be its last year in purgatory, and that shareholders can look forward to a brighter, more profitable year in 2018”.
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.
Khalaf added that the “botched Williams & Glyn separation has also been a costly embarrassment for RBS.”
The bank “spent £700m in 2016 to spin off the bank, on top of £750m to fund the new plan, which totally dispenses with the need to hive off Williams & Glyn,” he said.
“Assuming the plan goes ahead, RBS faces further restructuring costs to re-integrate the bank it has been trying to separate from for such a long time.
“The bank is certainly making progress, though it has been severely hampered by mopping up the mess left by the financial crisis. There is every reason to believe RBS can be a profitable bank, returned to private hands, the question is how long it will take to get there.”
