Royal Bank of Scotland reports £2bn loss
RBS (Royal Bank of Scotland) has reported a loss of £1.98bn loss for 2015, its 8th year of annual losses. The deficit is partly due to £3.6bn for litigation costs, including £600m to cover claims over the mis-selling of payment protection insurance. The bank, which is still 73% government owned, set aside £2.9bn for restructuring.
Once these costs are stripped out, RBS posted a £4.4bn underlying profit, down from £6bn a year earlier. RBS said the fall in underlying profits was due to lower income from interest payments, Chief executive Ross McEwan told the BBC’s Today programme: “Low interest rates do hurt banks and its very clear interest rates will stay lower for much longer now.
“The UK and Republic of Ireland have quite strong economies… but you are seeing a slowing down in a number of economies around the world and low interest rates do hurt banks.”
Mr McEwan added: “We still have a lot of work to do in the cost base of the business”