The UK’s most-troubled bank is awash in red ink. Today, the Royal Bank of Scotland announced a loss of £7 billion ($8.8 billion) for 2016, more than triple its 2015 loss. The result extends the bank’s streak to nine consecutive years of losses, worth nearly £60 billion, or $75 billion.
Needless to say, that’s bad news for British taxpayers, who still own 72% of the bank after its 2008 bailout. The government, which paid about £5 per share to rescue the group, gave up trying to break even on its holding, and started selling down the public’s stake in the bank in 2015 at a loss.
Ross McEwan, RBS’s eternally hopeful chief executive, says better days are just around the corner. “This bank has great potential,” he said in a statement, and expects to make it an even 10 years of losses before the bank finally returns to profit in 2018. Over the next four years, RBS plans to cut costs by £2 billion, which will mean more job cuts and branch closures.
Much of RBS’s 2016 loss was down to £5.9 billion in charges related to litigation. The bank is currently facing a hefty fine from the US Department of Justice—perhaps between $12 billion and $20 billion—for selling dodgy mortgage-backed securities before the financial crisis. RBS has already set aside £6.7 billion to cover the fine. It also continues to pay for other past misdeeds, including payment protection insurance mis-selling.
“These costs are a stark reminder of what happens to a bank when things go wrong,” McEwan said in a statement.
Somewhat of an understatement.