RBS Trebles Losses Drag FTSE Down

RBS Trebles Losses Drag FTSE Down.

Today Royal Bank of Scotland (RBS), which is over 70% owned by the tax payer, has reported a £7bn for 2016.  This more than trebles its losses for 2015 at £2bn.

The news rocked the City, with FTSE falling immediately by 0.75%.

Losses are due to provisions for mis-selling and in particular US mortgage securities, which RBS has made provision for a hefty fine from US regulators.

This is the 9^th year for losses at RBS and the expectation is for this to continue for at least another year.

Comment

Optimistic given that we do not know the start of Brexit terms let alone the outcome.

Interestingly, just two days ago Lloyds Bank published a 10 year record high profits of £4.2bn, 2.5 times its pre-tax profits for 2015.

Until banks have finally cleaned up their act, mis-selling fines are going to impact not just on profits but public trust in the brand long term.