RBS made its 9th consecutive year of losses and says it won't make a profit until 2018

Ross McEwan, Chief Executive of RBS (Royal Bank of Scotland) speaks to reporters and investors on February 27, 2014 in London, England. RBS has announced a pre-tax loss of £8.2bn for 2013, the biggest since the bank was rescued by the UK tax payer. (Photo by )

Peter Macdiarmid/Getty Images

The Royal Bank of Scotland just reported its ninth consecutive year of losses.

The bank, which is 73% state-owned, said in its full year financial results statement that it lost £6.955 billion compared with £1,979 million in 2015.

The reason it lost so much money is down to:

• Litigation and conduct costs — money set aside for legal issues and compensation — of £5.868 billion;

• Restructuring costs —£2.106 billion, which includes the £750 million provision on the back of the W&G update;

• Final Dividend Access Share (DAS) payment to the Treasury — £1.2 billion. The DAS system was created after the bank's bailout in 2008, which means the government gets a payout of dividends before any other shareholder. 

• Capital Resolution disposal costs — £825 million.

RBS CEO Ross McEwan said in a statement emailed to Business Insider (emphasis ours):

"The bottom line loss we have reported today is, of course, disappointing but given the scale of the legacy issues we worked through in 2016, it should not come as a surprise.

"These costs are a stark reminder of what happens to a bank when things go wrong and you lose focus on the customer, as this bank did before the financial crisis. We made good progress throughout 2016 against our strategy. 

"Our core business generated £4.2bn in adjusted pre-tax operating profit for the year – that’s an average of £1 billion per quarter for the last eight quarters. We were the fastest growing large bank in the UK last year with £24bn of new lending into the economy supporting over a million businesses and home owners. This bank has great potential. We believe that by going further on cost reduction and faster on digital transformation we will deliver a simpler, safer and even more customer-focused bank."

Here he identifies what the two biggest problems are for RBS in a video:

Tweet Embed:
https://twitter.com/mims/statuses/835029611784388608
The first part of RBS CEO Ross McEwan on the 2016 results video. He outlines the two biggest problems. pic.twitter.com/X9sF4HAU63

And here is how he says they plan to solve them, in the second part of the video:

Tweet Embed:
https://twitter.com/mims/statuses/835030319216607232
And here is the 2nd part of RBS CEO Ross McEwan on the 2016 results video pic.twitter.com/acRFsx8w1T

Analysts expected the bank to report losses of around £5 billion, as its margins continue to be squeezed by record-low interest rates.

RBS has already lost a total of around £58 billion since the 2008 financial crisis. 

RBS also plans to cut costs by £2 billion over the next four years. It has also made over £1 billion in savings in 2014 and 2015. 

The bulk of the new savings will come from staff cuts in its main offices in London and Edinburgh, and from shutting down high street branches. The bank currently employs 92,000 across the globe.

The list of RBS' problems

The results follows a range of issues that have cropped up for the bank over the last couple of weeks.

This month, a former RBS employee and a number of customers accused the bank of systematically manipulating documents and phone transcripts in order to cover up wrongdoing.

In a statement to Business Insider, RBS "categorically denied manipulating or falsifying customer records to suit our purposes."

The UK government told the RBS that it does not need to sell its spin-off Williams & Glyn unit, which was initially a condition of its government bailout in 2008.

The EU still has to approve the plan but RBS has struggled to sell it's W&G unit for years. Initially, when RBS was bailed out by the UK taxpayer for £45 billion from 2008, one of the conditions was that RBS must sell W&G as a condition of returning excess capital and dividends to investors.

The bank is still almost three-quarters owned by the British government, despite the government gradually selling off small portions of the bank in the past two years.

Insiders said that McEwan "is so pissed off" that "I’d be staggered if he was still around in a year’s time."

However, RBS and McEwan have rejected claims that he will be leaving the bank soon.

RBS also did not mention anything about contingency plans surrounding Brexit.

 

NOW WATCH: We went inside a Sears and saw why the company is dying

See Also:

• Goldman Sachs Asset Management Europe boss says it's 'too soon to tell' on Brexit job moves

• Nissan says the UK car industry needs £100 million of government support to survive Brexit

• The pound is falling on reports of a fresh Scottish independence referendum

SEE ALSO: Britain's government is letting RBS give up on key promise it made when it got a £45 billion bailout

DON'T MISS: Insiders think RBS boss McEwan may leave: 'Ross is so pissed off ... I’d be staggered if he was still around in a year’s time'

UP NEXT: An ex-RBS employee and customers have accused the bank of fraud, document manipulation, and forgery