Royal Bank of Scotland's losses soared to almost £9.0 billion last year on legal charges and the creation of a 'bad bank', but the state-rescued firm still paid millions in bonuses.
Net losses widened 49 percent to £8.995 billion ($15.0 billion, 10.9 billion euros) in 2013, RBS said in a results statement as it unveiled major new restructuring plans that will result in yet more job losses.
That compared with a loss after tax of £6.055 billion in 2012.
The Edinburgh-based bank, which is 81-percent state-owned after the world's biggest bailout during the global financial crisis, added it will slash its cost base by another £5.3 billion in the coming years and warned of more "inevitable" job cuts.
"Reducing costs and divesting businesses in the bank will inevitably result in reduced staff levels," chief executive Ross McEwan said in the results statement.
Media reports had suggested last week that RBS was seeking a jobs cull totalling at least 30,000, but no specific numbers were given on Thursday.
The loss-making bank meanwhile agreed to a staff bonus pool of £576 million, down 15 percent from 2012.
RBS was rocked last year by a £3.8-billion provision for a string of scandal-related charges and a £4.8-billion hit for the creation of an internal "bad bank" unit called RBS Capital Resolution.
The provisions include costs to meet US action over mortgage-backed financial products and compensation for the mis-selling in Britain of insurance covering credit products such as consumer loans.
It has taken a hit also from mis-selling interest rate hedging products, known as swaps, to small businesses.
RBS, which has additionally been fined over its role in the Libor interest-rate rigging scandal, has been dragged into an worldwide probe over alleged manipulation of foreign exchange trading along with other banks.
On Wednesday, RBS said its pre-tax losses surged to £8.24 billion in 2013, while revenues fell 12 percent to £19.44 billion.
- McEwan to shrink bank further -
McEwan on Thursday outlined a plan to shrink the bank's seven divisions to just three, and simplify its services and products for retail customers.
"We will move from a bank with seven divisions and seven support departments to a bank with three customer businesses -- personal, commercial, and corporate," he said.
And he pledged to transform RBS into a more UK-focused bank, with British assets set to increase from 60 percent to 80 percent of the business.
"This bank has had an extraordinary five years," McEwan said in a separate letter to shareholders.
"Cleaning up a £2.2-trillion balance sheet whilst addressing the many failings of the past has carried a very heavy cost, which shows in our results.
"Even by recent standards, 2013 was a difficult year. Regulatory fines, wide-ranging customer complaints, technology problems and public questioning of our integrity all weighed heavily, and bring into sharp focus the job we have at hand."
RBS was rescued with £45.5 billion of taxpayers' cash at the height of the 2008 global financial crisis.
McEwan became chief executive last year after Stephen Hester surprisingly left the group.
His departure had reportedly been at the request of Britain's finance minister George Osborne who wanted a new face to help guide the bank's return to private ownership.
Hester had earned the respect of the business community by axing 41,000 jobs, selling non-core assets and transforming the balance sheet at RBS, during his time at the helm.
Last November, New Zealander McEwan launched plans for the internal "bad bank" division to run down £38 billion of high-risk assets.
Royal Bank of Scotland’s losses soared to almost £9.0 billion last year on legal charges and the creation of a ‘bad bank’, but the state-rescued firm still paid millions in bonuses.
Net losses widened 49 percent to £8.995 billion ($15.0 billion, 10.9 billion euros) in 2013, RBS said in a results statement as it unveiled major new restructuring plans that will result in yet more job losses.
That compared with a loss after tax of £6.055 billion in 2012.
The Edinburgh-based bank, which is 81-percent state-owned after the world’s biggest bailout during the global financial crisis, added it will slash its cost base by another £5.3 billion in the coming years and warned of more “inevitable” job cuts.
“Reducing costs and divesting businesses in the bank will inevitably result in reduced staff levels,” chief executive Ross McEwan said in the results statement.
Media reports had suggested last week that RBS was seeking a jobs cull totalling at least 30,000, but no specific numbers were given on Thursday.
The loss-making bank meanwhile agreed to a staff bonus pool of £576 million, down 15 percent from 2012.
RBS was rocked last year by a £3.8-billion provision for a string of scandal-related charges and a £4.8-billion hit for the creation of an internal “bad bank” unit called RBS Capital Resolution.
The provisions include costs to meet US action over mortgage-backed financial products and compensation for the mis-selling in Britain of insurance covering credit products such as consumer loans.
It has taken a hit also from mis-selling interest rate hedging products, known as swaps, to small businesses.
RBS, which has additionally been fined over its role in the Libor interest-rate rigging scandal, has been dragged into an worldwide probe over alleged manipulation of foreign exchange trading along with other banks.
On Wednesday, RBS said its pre-tax losses surged to £8.24 billion in 2013, while revenues fell 12 percent to £19.44 billion.
– McEwan to shrink bank further –
McEwan on Thursday outlined a plan to shrink the bank’s seven divisions to just three, and simplify its services and products for retail customers.
“We will move from a bank with seven divisions and seven support departments to a bank with three customer businesses — personal, commercial, and corporate,” he said.
And he pledged to transform RBS into a more UK-focused bank, with British assets set to increase from 60 percent to 80 percent of the business.
“This bank has had an extraordinary five years,” McEwan said in a separate letter to shareholders.
“Cleaning up a £2.2-trillion balance sheet whilst addressing the many failings of the past has carried a very heavy cost, which shows in our results.
“Even by recent standards, 2013 was a difficult year. Regulatory fines, wide-ranging customer complaints, technology problems and public questioning of our integrity all weighed heavily, and bring into sharp focus the job we have at hand.”
RBS was rescued with £45.5 billion of taxpayers’ cash at the height of the 2008 global financial crisis.
McEwan became chief executive last year after Stephen Hester surprisingly left the group.
His departure had reportedly been at the request of Britain’s finance minister George Osborne who wanted a new face to help guide the bank’s return to private ownership.
Hester had earned the respect of the business community by axing 41,000 jobs, selling non-core assets and transforming the balance sheet at RBS, during his time at the helm.
Last November, New Zealander McEwan launched plans for the internal “bad bank” division to run down £38 billion of high-risk assets.
