Royal Bank of Scotland claimed its darkest days have passed as it posted annual losses of £3.6bn – down from £24bn in 2008.
The group’s core business – which includes only the departments that will remain after the bank is forced to restructure – saw profits jump from £4.4bn in 2008 to £8.3bn last year.
The investment banking wing of the business, Global Banking and Markets, made a profit of £5.7bn, compared to a loss of £1.8bn in 2008. But losses of £13.8bn caused by bad loans dragged the bank back into the red. The losses through bad loans in 2008 totalled £8.3bn.
Now the bank is confident these spectacular losses will not be repeated.
Chief executive Stephen Hester said he expected RBS to make a loss this year but swing back to profit in 2011.
He said: “We have achieved every target set for 2009. We tentatively believe the worst is behind us. This year will still be a hard slog. There is plenty of misery still to be captured and that will mean we will make a loss for the year.”
He also estimated the beleaguered bank lost out on up to £1bn thanks to an exodus of its top bankers brought about by its relatively weak bonus pot. Chairman Philip Hampton praised Hester’s efforts in turning round the ailing bank, which is 84 per cent owned by the taxpayer. Around £56bn of taxpayers’ money is still tied up in the bank.
The bank said it lent £80bn last year, including £60bn to businesses – well above the levels seen at some of its rivals.
Rival Lloyds will post its own results today.