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RBS posts £5.17bn full-year loss


The 81% state-owned bank records fifth annual loss since 2008 rescue

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Annual pre-tax losses at the Royal Bank of Scotland (RBS) have widened from £766 million in 2011 to £5.17 billion in 2012, it was revealed on Thursday.

The latest annual figure is the 81 percent state-owned bank’s fifth annual loss since it was rescued by the UK government in 2008. RBS attributed some of the losses to fines imposed in wake of payment protection insurance (PPI) and interest rate mis-selling and the penalties it faced in the Libor rate rigging scandal.

However, bulk of the pre-tax loss was down to a £4.6 billion accounting charge for changes in the value of its own credit; a measure of what it would cost to buy back its own liabilities. In a statement, RBS said 2012 had been a "chastening" year but one in which it sought to "put right past mistakes".

Excluding all of the special charges, the bank reported an operating profit of £3.5 billion.

Chief executive Stephen Hester said, "Another choppy year" lay ahead for the bank but added that "the light at the end of the tunnel is coming much closer".

The Libor fine took £381 million off the bank's profits but Hester said it would be recovering £302 million of that by reducing 2012 bonuses and clawing back previous ones. RBS also took a charge of £700 million for money it expects to have to pay out to cover mis-selling interest rate swaps along with a £450 million charge in the last three months of the year to cover PPI mis-selling, taking its total provision to £2.2 billion.

The bank also announced that it is going to begin the process of selling some of its US business, Citizens, on the stock exchange in about two years.

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RBS posts £5.17bn full-year loss
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