Company - - Feb 24,2017
RBS posted $8.74 billion loss, which is a reflection of around $12.5 billion of one-off payments including litigation and restructuring costs.
RBS, formerly the largest bank in the world has not made an annual profit since 2007. For 2016 the company reported a loss of $8.74 billion, against a $2.4 billion loss in the last year. The Company has now accumulated total losses of about $74 billion since the financial crisis of 2008. The bank has also admitted that it will not return to profit until 2018.
The main reasons behind the losses are:
• Conducts and Litigation charges — money for legal issues and compensation — $7.3 billion;
• Restructuring costs — $2.6 billion, including $0.94 billion for W&G update;
• Dividend Access Share (DAS) to the Government — $1.5 billion. The Government is paid dividends before any other shareholder, DAS was created after the bank's bailout package in 2008.
• Capital Resolution disposal charge — $1.03 billion.
The company has planned to cut costs and there would be further job losses at the bank as it targets $2.5 billion in savings over the period of four years.
RBS has lowered staff numbers from about 170,000 employees to under 80,000 over the past decade through firing and selling operations such as Citizens Financial Group Inc., a U.S. consumer banking firm.
The British government owns about 73 percent of RBS and has said that it will not resume selling its stake until the bank settles all its U.S. fine and complete its state aid requirements.
Shares of the company fell 2 percent shortly after markets opened in Europe.
In November last year, RBS failed the stress tests conducted by the Bank of England. This means RBS still remains susceptible to economic and financial stress.