RBS Royal Bank of Scotland Group PLC

By Max Colchester 

LONDON-- Royal Bank of Scotland Group PLC on Friday said it would cut an extra GBP750 million ($951.6 million) of costs out of the business this year as the state-controlled bank slumped to its ninth straight annual loss.

The 70% state-owned bank 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. The huge loss was expected as the bank had previously announced some of the provisions.

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 costs over the next four years. The bank says it can return to profit by 2018.

The huge net loss was mostly fueled by reserves the bank set aside to settle allegations with U.S. authorities over its role in the sale of mortgage-backed securities. RBS also spent GBP2.1 billion on restructuring the 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%.

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

(END) Dow Jones Newswires

February 24, 2017 02:43 ET (07:43 GMT)

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