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  1. Royal Bank of Scotland reports over $2 bn loss

Royal Bank of Scotland reports over $2 bn loss

The Royal Bank of Scotland (RBS) has reported a 2 billion pounds (about $2.8 billion) loss for the first six months of the year, which the chief executive blamed on "legacy issues".

By: | Edinburgh | Published: August 5, 2016 4:02 PM
Chief Executive Ross McEwan told the BBC that he had tried to sort out as many legacy issues as possible over the past two years, although he admitted that there would be “some hangover” in 2017. (Source: Reuters)

The Royal Bank of Scotland (RBS) has reported a 2 billion pounds (about $2.8 billion) loss for the first six months of the year, which the chief executive blamed on “legacy issues”.

Chief Executive Ross McEwan told the BBC that he had tried to sort out as many legacy issues as possible over the past two years, although he admitted that there would be “some hangover” in 2017.

The legacy issues include mis-selling payment protection insurance (PPI) to customers and litigation related to a 12 billion pounds rights issue in 2008 during the financial crisis.

Over the six months, the RBS set aside a further 450 million pounds to compensate customers who were mis-sold PPI, taking its total costs related to the scandal towards 5 billion pounds, the BBC noted.

“This is the issue when you do have difficulties of this nature some of them do date back 10 years. Some of the PPI issues are dating back to 1993 that we’re having to resolve, as is the industry,” McEwan said

“The core thing for me is that we’ve got a very strong bank here that can take these shocks,” the BBC quoted the chief executive as saying.

Shares in RBS fell 3.75 per cent to 184.8 pounds in early trading.

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