RBS clean-up set to push bank into a loss

RBS clean-up set to push bank into a loss

The Royal Bank of Scotland is expected to post a loss for 2015 after having to set aside £3.6bn following a string of problems and policy changes.

In a trading statement released today (27 January), the banking group set aside an extra £2.5bn to cover legal bills, compensation payouts and reduced income due to low interest rates.

The cash is set aside for US residential mortgage-backed securities litigation claims in the final quarter of last year.

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A total of £500m is in relation to payment protection insurance (PPI) claims.

Combined with extra pension fund payments it announced it must also make, the costs will mount to £3.6bn for RBS.

Ross McEwan, chief executive of RBS, said: “I am determined to put the issues of the past behind us and make sure RBS is a stronger, safer bank.

“We will now continue to move further and faster in 2016 to clean-up the bank and improve our core businesses.

“We’ve always been open about the scale of past issues facing RBS and although there is clearly much more to do, this announcement is a further step towards addressing legacy issues and building a great bank for our customers and delivering long term value for our shareholders.”