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RBS announces cost-cutting programme as losses spiral to £6.9bn

UK bank the Royal Bank of Scotland (RBS) has announced it is to embark on cost-cutting measures after revealing its ninth consecutive year of losses in its financial results this morning.

The bank, which is 72% owned by the taxpayer, saw losses rise to £6.9bn last year, up from a pretax loss of £1.9bn in 2015, on the back of one-off costs and litigation expenses.

According to its results posted to the stock exchange, RBS said that it had been forced to swallow £10bn in one-off costs, with £6bn of that relating to conduct charges such as the mis-selling of toxic securities in the US and the ongoing fallout from the Libor scandal.

As a result of its struggles, the bank also said that it would be looking to implement £2bn of cost savings over the next four years at it battles with legacy issues and attempts to stem its losses.

This would include the disposal of Williams & Glynn business, which has packaged parts of the RBS business that have to be divested by the end of this year, as well as likely branch closures and job losses.

Chief Executive Officer Ross McEwan commented: “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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