RBS: 'Bad Practice' Drives £5.16bn Loss

The 82% taxpayer-owned Royal Bank of Scotland has reported a pre-tax loss in 2012 of £5.16bn.

The significant loss was in part to provisions RBS has made for customer redress for payment protection insurance (PPI) mis-selling and other so-called bad practices.

It said the annual return was impacted heavily by a £4.64bn "accounting charge for improved own credit".

However bankers will still share a bonus pool of £607m, including £215m for investment bankers.

In 2011 the total bonus pot was around 25% higher, at £789m.

The bonus reduction was done to help recoup cash to pay for its recent Libor-rigging settlement with UK and US authorities.

RBS chief executive Stephen Hester admitted 2012 had been a "chastening" year to "put right past mistakes".

The losses were up significantly, from £1.2bn in 2011.

The company took a £450m charge in the last three months of 2012 over PPI mis-selling, taking its cumulative provision to £2.2bn.

By December 31 a total of £1.3bn had been paid out in redress over the scandal.

The bank said: "Our target is for 2013 to be the last big year of restructuring. There will be important work still to do, but an increasingly sound base from which to work.

"As the spotlight shifts to the 'new RBS' post restructuring, we are determined that it will show a leading UK bank striving to be a really good bank."

RBS saw changed fortunes in its core business, with retail and commercial sector income down 6% but markets up 68%.

The bank added: "RBS is four years into its recovery plan and good progress has been made. We are a much smaller, more focused and stronger bank.

"By serving customers well RBS can become one of the most respected, valued and stable of banks. That is our goal."

In its annual report the bank, which was bailed-out in Britain's biggest ever corporate disaster, said there is an intentional to partially float its US banking arm Citizens.

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