RBS reports £3.5bn loss, Davies new chairman, McEwan forgoes £1m bonus

26th Feb 2015 07:05

The Royal Bank of Scotland has more than halved its full year losses to reach £3.47bn as it continued to slim down its risk profile and confirmed the appointment of Sir Howard Davies as its new chairman in a shake-up of its top ranks.The loss followed a £4bn write-down on its US arm Citizens Financial and a £1.9bn tax charge that included a £1.5bn write-off of deferred tax assets, and compares with the £9bn loss made in 2013.Overnight, chief executive Ross McEwan announced that he would forgo a share award worth £1m as he did not want the allowance "to be a distraction from the task of building a great bank".The bank's bonus pool was also shrunk by 21% to £421m.At the operating level the bank reversed the previous year's £7.5bn loss into a £3.5bn operating profit thanks to improved results from the core domestic businesses and significant impairment releases in Ulster Bank and RBS Capital Resolution (RCR) and despite more than double restructuring costs compared with the previous year.RBS paid out £2.19bn of litigation and conduct costs, compared with £3,844 million in 2013."Last year we identified the areas we needed to improve in order to deliver our strategy - cost, complexity, capital and trust from our customers," said McEwan."The energy and resolve of our people have resulted in significant progress on each, and we have delivered on the goals we set for 2014."In a separate announcement RBS announced the sale of its North American loan assets to Japan's Mizuho Financial Group for a currently estimated cash consideration of $3bn as part of a broader revamp.That is a continuation of RBS's stated strategy of reducing the geographical footprint and risk profile of its Croporate and Institutional Banking unit. It now aims to operate in 13 countries, as opposed to 38 in fiscal year 2014.As a result, risk-weighted assets (RWA) will be cut from today's £107bn to between £35bn to £40bn in 2019. A reduction of £25bn in the bank's RWA is targeted for this year.As of 08:07 shares in RBS were higher by 1.96%.