Royal Bank of Scotland said Friday its 2016 annual losses more than tripled to 6.95 billion pounds ($8.7 billion, 8.21 billion euros).
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: "RBS is still paying for the sins of the past, though the bank is now saying that 2017 is going to be its last year in purgatory, and that shareholders can look forward to a brighter, more profitable year in 2018". The result extends the bank's streak to nine consecutive years of losses, worth almost £60 billion, or $75 billion. £5.9bn of the loss was in relation to further provisions in relation to conduct charges, while the bank also set aside another £201m in respect of PPI in Q4. The bank is now 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.
In an attempt to fix the bank, chief executive Ross McEwan has set out new cost-cutting measures for the next four years to the end of 2020, as margins come under pressure from record low interest rates.
It will include £750m of savings in 2017.
In the bank's results statement, Mr McEwan said: "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".
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While not specifying numbers, McEwan's words have sparked anger at labour union Unite, which has called for a moratorium on branch closures, highlighting the shuttering of over 520 RBS branches since 2014 and the loss of tens of thousands of jobs.
That means the bank has racked up more than 50 billion pounds in losses since 2008, when the government rescued it from collapse with a 45 billion pound bailout.
"Assuming we can conclude our issues on RMBS this year and resolve our residual State Aid obligations, we aim to have RBS back into profit in 2018 representing a significant step towards being able to start repaying United Kingdom taxpayers for their support".
To get the bank into profitability, Mr McEwan told the BBC that the bank needed to resolve its U.S. legal issues and the question of its Williams & Glyn unit, which lends to small and medium-sized businesses. Royal Bank of Scotland Group plc has a one year low of GBX 148.40 and a one year high of GBX 257.40.
The bank also intends to invest heavily in technology at its NatWest Markets business, replacing hundred of separate product databases with a single scalable platform.