The woes for the Royal Bank of Scotland (RBS) continue as the bank posted a substantial loss for the opening part of the year.
RBS, of which 80 per cent is owned by the taxpayer, announced a £446-million loss for the three months to March 31st. The bank highlighted a series of legal and restructuring costs as being responsible for the drop in performance. RBS had been preparing for these eventualities and had set aside £856 million for "litigation and conduct charges", as well as a further £453 million for restructuring costs.
The 2015 results are in stark contrast to the same period a year earlier where RBS posted a £1.2 billion profit. However, it maintained that the 2014 figure was reached due to a lack of one-off cost. It is confident that it can improve over the course of the year and highlighted that without the charges its profit rose by 16 per cent to £1.63 billion as it benefited from "generally benign credit conditions".
Commenting on the recent figures, RBS said: "These include advanced settlement discussions regarding the criminal investigation being conducted by the [US department of justice] and with certain other financial regulatory authorities and RBS expects that it will incur financial penalties in conjunction with any such settlements."
Continued loss making
RBS's latest announcement is just one in a string of poor results from the bank in recent months. In February, it revealed a loss of £3.5 billion over the course of 2014. While this was an improvement on the £9-billion decline a year earlier it was still a cause for concern for both the bank and taxpayer.
One of the defining factors in the marginally improved results was RBS's decision to sell its US business Citizens which wrote off around £4 billion.