RBS posts a HUGE loss for 2014 after being crippled by lawsuits and writedowns
The 81% state-owned bank revealed in its 2014 results statement that it was hammered by a significant amount of litigation costs, a writedown from its Citizens unit and restructuring charges.
It total it reported a loss of £3.5 billion for last year.
Citizens, its retail and commercial banking services unit which was bought by RBS in 1988, caused a £4 billion write down.
In September last year, RBS launched the Citizens IPO. It originally planned to sell the shares at between $23 and $25. However, following a lukewarm market debut, RBS ended up selling shares for only $21.50 each.
Meanwhile, in a bid to restructure the bank, the costs of doing so amounted to £1.3 billion. RBS also spent £2.2 billion on litigation and conduct provisions.
"It has taken far longer than anyone realised to root out all the past problems, practices and related fines, and
we still have challenges on the horizon. We are changing the culture of this bank; our aim is that
shareholders are not exposed to this scale of conduct risk again," said RBS CEO Ross McEwan, in the group's financial statement. "What you will have seen from me over the last year is the way I will be open and honest with you and our customers when dealing with these issues; the way we continue to approach FX is a good example of this."
"I will not hide. I will talk openly about the hurt this wrongdoing causes me and the many thousands of people within this bank. I will detail the things we are doing to put things right for our customers, and the challenge and change we are driving through the culture and conduct of our staff. We are determined to learn the lessons from the wrongdoings of the past and ensure that those responsible are held to account."
Meanwhile, McEwan just became the lowest paid CEO on the FTSE 100.
Only a few hours prior to RBS announcing its 2014 results, he revealed that he will forfeit £1 million out of his salary.
"Ross McEwan has told the RBS Board he does not intend to take the proceeds from his 2015 role based allowance. Ross does not want this issue to be a distraction from the task of building a great bank for customers and shareholders," said RBS in a statement.