dglobalnews.com Royal Bank of Scotland has lost money for 9 straight years
Published: Sat, February 25, 2017
Markets | By Armando Jensen

Royal Bank of Scotland has lost money for 9 straight years

Royal Bank of Scotland has lost money for 9 straight years

RBS has now notched up losses totalling more than £55 billion over the past eight years.

The group - which is 72% owned by the taxpayer - has had to funnel billions into restructuring, conduct and litigation charges.

Restructuring costs amounted to £2.1bn as the bank continues to retrench from overseas countries to focus on United Kingdom retail and commercial banking. "But the next three years will not be the same as the past three", Chief Executive Ross McEwan said in the statement.

However, restructuring costs in 2017 are expected to amount to GBP1.00 billion, excluding the costs associated with the mandated restructuring of its Williams & Glyn branches. The bank recently revealed it had set aside another £3bn ahead of an expected fine from the United States authorities linked to the sale of sub-prime mortgage-backed securities.

RBS had received a 45 billion-pound bailout from the British government in 2008 after the global financial crisis exposed the excesses of an expansion drive that briefly made it the world's biggest bank.

The bookmaker said adjusted operating profit slumped 10% to £261.5 million in the year to December, with William Hill taking a huge hit on Boxing Day.

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RBS has plans to cut its costs by £2bn over the next four years, branches could close and job losses could be the result of this adjustment. More specifically, he also demonstrated a willingness to continue pursuing his efforts to boost capital for RBS.

RBS also said it is pushing its medium-term target of a 12% return on tangible equity and cost to income ratio of below 50% back one year to 2020.

The RBS Group, which includes RBS and NatWest, put aside £601 million in 2016 to cover mis-sold payment protection insurance (PPI), according to the banks' financial results published today.

"So far we've had nine reminders of the costs of what happens when things going wrong and Mr McEwan like the rest of us must be hoping that we don't get a tenth", he added.

Instead, RBS and the government have suggested the bank gives £750m - which the bank has set aside - towards initiatives created to boost competition in United Kingdom business banking.

He said it was too early to say if the Williams & Glyn branches now being retained by RBS, with the negotiated agreementof the European Commission, would be rebranded in the United Kingdom and Wales or retain the RBS name.

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