By Gerald Heneghan
Royal Bank of Scotland (RBS) has revealed it suffered a pre-tax loss of more than £5 billion in 2012.
In a year that group chief executive Stephen Hester described as “chastening” the bank was hit by a series of charges, with much of the deficit coming from a £4.6 billion accounting charge for alterations to the value of RBS’ own credit.
Similarly, the institution had to face a £460 million charge in relation to the PPI mis-selling scandal and a further £700 million charge for money earmarked for covering payouts in regard to the mis-selling of interest rate swap products.
Mr Hester claimed that RBS had made “good progress” and 2013 would be the last big year for restructuring.
“We are determined to overcome the cultural and reputational baggage of pre-crisis times with the same focus we have applied to the financial clean-up from that era,” he said.
However, in a conference call with journalists, Mr Hester conceded that the bank faced another “choppy year” in 2013, but expressed optimism for its prospects.
“The light at the end of the tunnel is coming much closer,” he added.
The latest hit marks RBS’ fifth annual loss since it was bailed out by the taxpayer in 2008 and shares in the financier dropped to three per cent in early trading this morning (February 28th).
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