 "RBS posts $15-bn loss for 2013")
Royal Bank of Scotland Group, the British lender that is trying to return to health after nearly collapsing during the financial crisis, on Thursday posted a huge annual loss as it set aside more money for its legal woes and a substantial pool for bonuses.
The bank, based in Edinburgh, reported a 2013 net loss of £9 billion, or about $15 billion - nearly 50 per cent larger than the £6.1 billion loss it reported a year earlier. It was the biggest shortfall since 2008, when the bank posted a loss of £24.3 billion.
The loss grew as the bank set aside £3.8 billion for possible legal bills and wrote down the value of assets by £4.8 billion.
"Even by recent standards, 2013 was a difficult year," Ross McEwan, the bank's chief executive, said in a statement adding, "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."
The bank will continue its deep restructuring, and said it would cut £5.3 billion from costs over the medium term, partly by retrenching internationally to focus on its home market in Britain.
Although RBS did not offer any details Wednesday on job cuts, its 120,000 head count seems certain to fall as it shrinks its offerings.
McEwan told the BBC that RBS had spent the past five years trying to return to sound footing but that, "to be realistic," it would be another three to five years before it would be profitable again.
The bank also said it had set aside £576 million for its 2013 bonus pool, down 15 percent from a year earlier, but still a figure with heavy political implications for an institution that remains in the hands of taxpayers.
"It is incomprehensible to the taxpayer why they should be allowed to award £576 million in bonuses for a failure to perform and the government should explain why it has failed to take action on behalf of the taxpayer," Arlene McCarthy, a Labour Party member of the European Parliament, said in a statement.
McCarthy, who served as lead negotiator in 2010 for the European Union's new rules on bankers' bonuses, accused the British government of failing to take advantage of measures that allow the state to suspend bonuses for bailed-out banks.
"The 2010 rules were designed for special cases where banks are not in profit and continue to owe money to the government," she said.
The state holds 81 per cent of RBS shares, after British taxpayers bailed it out with £45 billion. Since 2009 the ailing lender has cut more than £1 trillion from its balance sheet. But the continuing hangover from the credit bubble and, above all, RBS's disastrous 2007 takeover of the Dutch bank ABN Amro, have left it looking perpetually in the rear-view mirror.
The ABN Amro deal, engineered by the bank's former chief executive, Frederick A. Goodwin, left RBS briefly as a giant on the world stage.
"It's fair to say that this bank is much bigger than it needs to be, because it's got the overhang from when it was the largest bank in the world," McEwan said in an interview posted on the bank's website, "and we're no longer there." He added that it was his "aspiration" to make RBS "the best bank in the UK with international operations that support that."
©2014 The New York Times News Service
The bank, based in Edinburgh, reported a 2013 net loss of £9 billion, or about $15 billion - nearly 50 per cent larger than the £6.1 billion loss it reported a year earlier. It was the biggest shortfall since 2008, when the bank posted a loss of £24.3 billion.
The loss grew as the bank set aside £3.8 billion for possible legal bills and wrote down the value of assets by £4.8 billion.
"Even by recent standards, 2013 was a difficult year," Ross McEwan, the bank's chief executive, said in a statement adding, "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."
The bank will continue its deep restructuring, and said it would cut £5.3 billion from costs over the medium term, partly by retrenching internationally to focus on its home market in Britain.
Although RBS did not offer any details Wednesday on job cuts, its 120,000 head count seems certain to fall as it shrinks its offerings.
McEwan told the BBC that RBS had spent the past five years trying to return to sound footing but that, "to be realistic," it would be another three to five years before it would be profitable again.
The bank also said it had set aside £576 million for its 2013 bonus pool, down 15 percent from a year earlier, but still a figure with heavy political implications for an institution that remains in the hands of taxpayers.
"It is incomprehensible to the taxpayer why they should be allowed to award £576 million in bonuses for a failure to perform and the government should explain why it has failed to take action on behalf of the taxpayer," Arlene McCarthy, a Labour Party member of the European Parliament, said in a statement.
McCarthy, who served as lead negotiator in 2010 for the European Union's new rules on bankers' bonuses, accused the British government of failing to take advantage of measures that allow the state to suspend bonuses for bailed-out banks.
"The 2010 rules were designed for special cases where banks are not in profit and continue to owe money to the government," she said.
The state holds 81 per cent of RBS shares, after British taxpayers bailed it out with £45 billion. Since 2009 the ailing lender has cut more than £1 trillion from its balance sheet. But the continuing hangover from the credit bubble and, above all, RBS's disastrous 2007 takeover of the Dutch bank ABN Amro, have left it looking perpetually in the rear-view mirror.
The ABN Amro deal, engineered by the bank's former chief executive, Frederick A. Goodwin, left RBS briefly as a giant on the world stage.
"It's fair to say that this bank is much bigger than it needs to be, because it's got the overhang from when it was the largest bank in the world," McEwan said in an interview posted on the bank's website, "and we're no longer there." He added that it was his "aspiration" to make RBS "the best bank in the UK with international operations that support that."
©2014 The New York Times News Service