Stocks in Royal Bank of Scotland (RBS) have fallen today (February 27th) on the back of the bank announcing its latest financial results.
RBS revealed that it recorded a pre-tax loss of £8.2 billion for the full year 2013, which is the fifth year in a row it has made a loss since being bailed out by the UK government.
The bank stated that it made an operating profit of £2.5 billion once bad bank and legacy costs are stripped out of the financial results.
Speaking to BBC News, Ross McEwan, RBS' chief executive, described the results as "very sobering". RBS has also incurred impairments and losses of £4.8 billion in the last 12 months.
Speculation is rising that thousands of jobs are going to be cut by the bank as it aims to improve its financial position, but RBS has yet to comment on the reports in the media.
Mr McEwan said that "reducing costs and divesting businesses in the bank will inevitably result in reduced staff levels". He added: "We do not yet have detailed plans for implementation. We will deal with such matters sensitively, talking to our staff before communicating any such changes."
RBS has a cost-to-income ratio that currently stands at 73 per cent and the bank is aiming to bring this down to 55 per cent by 2017. It said in a statement that it will do this by "cutting around £1 billion of operational spend on things that don't help our customers".
Mr McEwan revealed that RBS plans to restructure its seven divisions in the coming years, as well as its support departments. This will leave just three customer businesses: personal, commercial and corporate. RBS, which is still partly owned by the UK government, is also aiming to become the "the number one bank for customer service and the most trusted bank in the UK" by 2020, Mr McEwan said.
By 09:23 GMT this morning, the share price of RBS was down by almost five per cent and was still falling following the announcement of the massive loss for the year 2013.
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