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£3.5bln losses - a 'good' year for RBS

Thursday, February 26, 2015 - 02:11

RBS - once the world's largest bank - is to drastically shrink its investment operations, pulling out of 25 countries and allowing the state-controlled lender to refocus on Britain. As Ivor Bennett reports the decision follows a 2014 loss of £3.5 billion.

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For most companies, a 3.5 billion pound loss would be disastrous. But for the Royal Bank of Scotland, this is considered pretty good. 2013's deficit was as much as 9 billion. The bank is 7 years into an unprecedented corporate diet. Shedding 1 trillion pounds worth of assets. A writedown on the sale of its US business pulled down last year's results. And CEO Ross McEwan is confident the overall plan is working. SOUNDBITE (English) ROSS MCEWAN, CEO, ROYAL BANK OF SCOTLAND, SAYING: "I think the bank is going to be in much better shape by the end of this year and into 2016. And we are building it now that actually the value of this bank is starting to rise, you've seen that. The share price has moved probably better than any other bank in the UK in the last 12 months." But not in today's trading, Shares dropping over 5 percent, suggesting investor confidence is still shaky. RBS used to be the largest bank in the world. But a further 800 million pounds of cutbacks this year will see its operations shrink from 38 countries...to just 13, as it refocusses on local lending. RBS is still 79-percent owned by the taxpayer, after a 45 billion pound bailout in 2008. Its losses since then have almost reached 50 billion. Bonuses unsurprisingly are still a bone of contention. Though the boss won't be taking one, others will be... ...to the tune of £420 million. SOUNDBITE (English) ROSS MCEWAN, CEO, ROYAL BANK OF SCOTLAND, SAYING: "Look, I accept that with remuneration and bonuses the public are angry about why we would be paying bonuses when we're still losing money. But underneath that there's a £3.5 billion operating profit of this business and that's what the people are contributing too." Standard Chartered is another UK bank undergoing massive restructuring, but for them, in personnel. Investors at the Asia-focused bank have demanded changes at the top after two years of problems. Former JP Morgan investment bank boss Bill Winters has been named the new CEO. He'll take over from Peter Sands in June, with chairman John Peace also leaving next year.

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£3.5bln losses - a 'good' year for RBS

Thursday, February 26, 2015 - 02:11