The Royal Bank of Scotland (RBS) has warned it will report its eighth successive full-year loss this year as it sets aside £2bn for past scandals including claims relating to mortgage-backed securities and payment protection insurance.
Ahead of announcing its annual results for 2015, the bank said it is making an additional £1.5bn provision relating to US mortgage-backed securities, a sum that does not include provisions for investigations by the Department of Justice or US Attorneys investigations.
Following guidance from the Financial Conduct Authority it is also making an additional provision of £500m for payment protection insurance mis-selling in the UK, taking total incurred costs and future provisions to £4.3bn.
With Chancellor George Osborne keen to sell off the government’s 73% stake in the bank over the course of this Parliament, RBS chief executive Ross McEwan said the bank will conduct a ‘clean-up and improve our core business’.
McEwan said: ‘We’ve always been open about the scale of past issues facing RBS and although there is clearly much more to do, this announcement is a further step towards addressing legacy issues and building a great bank for our customers and delivering long term value for our shareholders.’
RBS is also in the process of appointing a new group general counsel after high-profile legal chief John Collins resigned after just 11 months for a role at Santander UK as director of legal, compliance, regulatory affairs, and anti-money laundering.
The bank also recently refreshed its external adviser panel with Magic Circle firms Clifford Chance, Linklaters and Allen & Overy winning appointments to the roster for the next three years.