This is the eighth year in the row the bank has posted an annual loss as it continues to rebuild from its near collapse during the 2008 financial crisis.
Shares were down over 10% in early trading before a modest recovery.
The RBS commercial and private banking division, which incorporates wealth management arm Coutts, contributed 33% to RBS’ total income through operating profit of £1.708bn, down 11% from the previous year.
RBS said its private banking offering is being “refocused on its UK connected customers, with a simpler operating model and new customer propositions.”
Chief executive Ross McEwan said: “RBS made progress again in 2015. We ended the year a simpler, stronger bank with a business anchored squarely in the UK and Ireland, focused on retail and commercial markets.”
“The financial sector, and predominantly Lloyds, may have been one of the driving forces of yesterday’s moves higher but RBS’s slump is a return to normality,” said IG market analyst Alastair McCaig. “The bank’s CEO, Ross McEwan, might well feel the bank has achieved everything it wanted to in 2015, but an eighth year of losses – now totalling £51 billion – has not impressed the markets, sending the shares tumbling by over 9%.”
“Royal Bank of Scotland shares dropped like a stone in early morning trading, as the bank posted a £2 billion loss and postponed paying its dividend,” added Laith Khalaf, senior analyst at Hargreaves Lansdown. “The UK government however will get a £1.2 billion dividend in the next few months, due to the special nature of the shares it bought in the bank as a condition of the bailout. The recurring profit of the underlying RBS business was £4.4 billion, but £3.6 billion of litigation and conduct costs and £2.9 billion of restructuring costs pegged this back to a £2bn loss.”
