RBS reveals pre-tax loss of £766m

RBS bosses said they were on the way to rebuilding a successful, profitable bank.

Commenting on the bank’s annual results, Stephen Hester, group chief executive of RBS, said: “We have three jobs at RBS - to support our customers, to defuse our legacy risks and to rebuild a successful profitable bank. In 2011 we showed results across all three goals, though with much still to do.

“RBS core profits - the ongoing bank - were £6bn, comparing well with others and representing a return on equity of 10.5 per cent.

“The reduction in our balance sheet since 2008 now exceeds £700bn with all other safety measures improving strongly. And we provided service to more than 30 million customers worldwide.

“In UK lending support specifically, we provided £94bn gross lending to corporates (£41bn to SMEs) exceeding our targets and far exceeding any competitor bank.”

One-off and other items amounted to a net charge of £2,658m, including significant legacy costs for the group such as £850m relating to PPI costs, £1,099m in sovereign debt impairments plus integration and restructuring costs of £1,064m.

There was also a charge of £300m for the bank levy.

An impairment of £1,099m was taken on the group’s AFS bond portfolio in 2011 as a result of the decline in the value of Greek sovereign bonds.

As of 31 December 2011, the bonds were marked at 21 per cent of par value.