RBS hits taxpayers with £2 billion annual lossPPI refunds and Greek debt contribute to losses
23 February 2012
Royal Bank of Scotland lost £2 billion during 2011, almost double the £1.1 billion deficit of 2010, as it was hit by payment protection insurance compensation bills and the inability of the Greek government to repay its debts.
Presenting its 2011 full year results, RBS said that its before-tax loss had increased from £399 million in 2010 to £766 million last year, while the attributable loss, which is the bottom line for shareholders, reached £2 billion. UK taxpayers own 82% of the bank after providing £45 billion to bail it out in 2008.
PPI payments top £1 billion
RBS has set aside a total of £1.05 billion to pay compensation to customers that bought payment protection insurance (PPI) that they did not need. It has also lost a similar amount on loans to the Greek government.
RBS’s core divisions, which include NatWest, reported operating profits of £6.1 billion, down from £7.4 billion last year.
RBS urged to review bonuses
Last month, RBS chief executive Stephen Hester rejected a bonus of close to £1 million following pressure from politicians and the public. While bonuses among RBS investment bankers have more than halved since 2010, basic salaries have risen significantly.
Earlier this week Lloyds Banking Group announced that it would claw back bonuses paid to a number of its senior employees involved in the mis-selling of PPI and Which? is calling on other banks to follow suit.