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Insurance losses rock RBS as it records £2 billion loss

Insurance losses rock RBS as it records £2 billion loss

Insurance losses rock RBS as it records £2 billion loss The Royal Bank of Scotland (RBS) has announced a worse than expected £1 billion loss for the quarter, making for a £2 billion total loss for the year as the mis-selling of payment protection insurance continues to hit the bank’s bottom line.

Speaking to the BBC, RBS chief executive Ross McEwan said the bank had tried to sort out as many legacy issues as possible, but admitted some will linger into 2017. RBS has set aside an additional £450 million to compensate customers who were mis-sold PPI as claims continue to roll in. The saga has cost the bank a total of £5 billion. McEwan said the challenge of dealing with these claims is that some date back to the early 90s. The Financial Conduct Authority (FCA) recently extended the deadline for claims by another year.

The bank has also been spending on litigation relating to a £12 billion rights issue dating back to 2008.

It has been hit badly in other sectors as well, and will abandon the IPO of its ‘challenger’ bank Williams & Glyn after suffering months of IT complications the Financial Times reported. It is reportedly in discussions to sell the branches to Santander.

Shares in the bank fell 3.75% in early trading, with analysts describing the situation as an extraordinary run of bad luck.

RBS has now had eight years in a row of annual losses. The bank has also delayed passing on yesterday’s rate cut by the Bank of England to customers.