RBS announces £5bn losses

The Royal Bank of Scotland has announced losses of £5.16billion - a fifth consecutive annual loss. Chief Executive Stephen Hester described 2012 as a "chastening" year. It was also revealed the bank paid £607m in bonuses in 2012.

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Stephen Hester: 'Good progress' has been made

RBS chief executive Stephen Hester has declared that good progress has been made on the bank's recovery plan despite a sharp rise in losses.

RBS is four years into its recovery plan and good progress has been made.

We are a much smaller, more focused and stronger bank.

Our target is for 2013 to be the last big year of restructuring.

There will be important work still to do, but an increasingly sound base from which to work.

As the spotlight shifts to the ‘new RBS’ post restructuring, we are determined that it will show a leading UK bank striving to be a really good bank.

By serving customers well RBS can become one of the most respected, valued and stable of banks.

That is our goal.

– RBS chief executive Stephen Hester

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RBS to reveal damage from a succession of scandals

RBS is to released its full year financial results today. The state-backed bank has been rocked by its fair share of scandals in the past year. Here is a brief reminder:

  • Fined £390 million for its part in the Libor rate-fixing scandal
  • Had to put aside millions to compensate small business customers for the mis-selling of interest rate swaps
  • Put aside an additional £400 million to pay for the mis-selling of PPI, bringing the total costs involved to £1.7 billion

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Speculation that RBS is struggling to offload branches

As RBS prepares to announce its annual figures, there is speculation that the bank has hit further troubles in trying to offload the 316 branches to meet EU rules on state aid.

Following the collapse of the bank's sale to Santander, RBS is said to be looking at selling a minority stake to private equity and institutional investors to kick-start the auction process.

The bank has already cut its investment banking finance from £500 billion to £300 billion Credit: Danny Lawson/PA Wire

The bank has already cut its investment banking finance from £500 billion in 2008 to £300 billion.

RBS has also cut more than 5,000 jobs, with its investment arm now employing around 11,000 people.

RBS annual figures: What can we expect?

  • The bank could show further improvements with core profits of £6.3 billion, up from £6 billion in 2011
  • Underlying group earnings to rise to £3.5 billion (previously £1.8 billion)
  • Overall increase in core profits would be "underwhelming", a sign of difficulties in increasing corporate and personal lending
  • Investment banking division is likely to show higher profits under boss John Hourican

Experts predict more losses for RBS results

As the Royal Bank of Scotland releases its annual figures this morning, experts predict increased bottom-line losses.

Staff bonuses could be high on the agenda Credit: Johnny Green/PA Wire

It is thought that staff bonuses will be high on the agenda of today's announcement, as the bank is set to confirm the size of the pool to be shared among staff.

According to banking analyst Ian Gordon, there could be compensations for mis-selling, which could see RBS fall deeper into the red.

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