RBS Royal Bank of Scotland Group PLC

By Max Colchester 

LONDON-- Royal Bank of Scotland Group PLC reported its ninth straight annual loss but pledged an extra GBP750 million ($951.6 million) of costs cuts this year and said it hoped 2017 would mark the end of its decadelong restructuring.

The 70% state-owned bank on Friday said its annual net loss more than tripled to GBP6.96 billion, as the bank put aside billions to cover conduct issues. Revenue fell 2% to GBP12.6 billion compared with the year earlier as the lender continued to shed businesses.

Shares in the bank fell about 2%, with the huge loss expected after the bank announced some of the provisions last month.

RBS's management said it hoped 2017 would be the last year of upheaval for the bank, with Chief Executive Ross McEwan saying the lender should be profitable by 2018. Since its bailout in 2008 RBS has shed nearly half its staff. In the last four years it exited 26 countries and ditched nearly three quarters of its unwanted assets.

The bank still needs to settle with U.S. authorities over its role in the sale of toxic mortgage-backed securities. It also has to agree a suitable punishment with European Union authorities for being propped up by taxpayers during the crisis. "Once these are resolved we can break free from our legacy issues," said Mr. McEwan.

RBS revised its financial targets saying it would cut its cost to income ratio to 50% by 2020, a year later than planned. It also said it would cut an extra GBP2 billion of cost over the next four years. Executives remained coy about when it would be able to pay a dividend.

The huge net loss was mostly fueled by GBP3 billion reserves the bank had already set aside to settle allegations over conduct with U.S. authorities. RBS also spent GBP2.1 billion on restructuring its business. Once all the restructuring costs, fines and unwanted businesses are stripped out the bank made an underlying operating profit of GBP4.2 billion, up 4% on last year.

RBS last week took a step to resolve a long running request from EU authorities for it to shed 300 branches. The branches had to be sold as a condition of the bank's bailout in 2008. The bank gave up trying to split the branches out of its business after spending GBP1.8 billion on the project. The U.K. Treasury has suggested RBS pay GBP750 million instead, including handing out cash to smaller competitors. Mr. McEwan said it would take six months to find out whether the proposal was acceptable.

Mr. McEwan played down speculation he may soon step aside. When asked whether he would be around to see the bank make a profit in 2018 he replied, "I certainly hope so."

Write to Max Colchester at max.colchester@wsj.com

(END) Dow Jones Newswires

February 24, 2017 04:00 ET (09:00 GMT)

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