RBS logs £5.2bn loss

City A.M. Reporter

RBS slumped to a pre-tax loss of £5.2bn last year, as it said it had moved closer to being in a good position for the government to sell its stake.

The bank, which is 82 per cent owned by the taxpayer, was hit by compensation claims for payment protection insurance (PPI), interest rate hedging product redress and Libor settlements.
“We have made RBS safer. It is much closer now to being in the good financial health that would allow shareholders to receive a dividend and the government to start to sell its stake,” chairman Philip Hampton said this morning.
The bank was rescued in a £45.5bn bailout during the 2008 financial crisis, and the government is now looking at ways to sell off its holding as RBS starts to return to financial health.
The bank said it had set aside a further £450m to compensate customers mis-sold PPI taking its total provision to £2.2bn. Some £1.3bn has already been paid out.
RBS has also set aside £700m to compensate small businesses mis-sold complex interest rate hedging products.
The bank, led by Stephen Hester, said about £302m had been cut from staff bonuses, clawed back from past awards or to be cut from future payments to account for behaviour related to the rigging of interest rates, for which the bank was fined $612m.
Bonus awards fell 23 per cent year on year to £607m for 2012.
Additionally, RBS said it planned to sell part of its US business Citizens in the next two years and would likely float a batch of 315 UK branches it has struggled to offload.