Government owned RBS bank has announced a £469 million pound loss for the three months from July until September as the bank struggles to deal with fines relating to the mis-selling of payment protection insurance.
During the financial crisis of 2008, the Edinburgh based bank faced a myriad of issues and problems and at one point was teetering on the verge of bankruptcy, before the bank was rescued by a government bailout which totaled £45.5 billion.
RBS has also been having major problems with regulators in the United States and the bank has had to dole our large fines for it’s banking practices.
RBS is still 73% owned by the government following its emergency bailout in 2008.
Its latest attributable or “bottom-line” loss was widened by restructuring costs of £469m and conduct and litigation costs of £425m, as well as a deferred tax write-off of £300m.
The third-quarter loss compares badly with the same period last year, when RBS posted a profit of £940m. But that was flattered by proceeds from the sale of US bank Citizens.
Unlike Lloyds and Barclays earlier this week, RBS has made no new provision for costs arising from mis-selling of Payment Protection Insurance (PPI).
The new litigation costs have been set aside in readiness for expected liabilities in the US, where the bank faces charges in relation to the sale of mortgage-backed securities in the run-up to the financial crisis.
However, RBS Chief Executive Ross McEwan stated that the reason for the losses were essentially beyond their control:
“We’ve said that 2015 and 2016 would be noisy as we work through legacy issues and transform this bank for customers. These results reflect that noise.
“Our core business results were good, with a £1.3bn adjusted operating profit, our best quarter since 2014.
“The core business has now delivered on average over £1bn in adjusted operating profit for the last seven quarters.”