UK state-rescued RBS net loss reaches £9bn

Britain's state-rescued Royal Bank of Scotland plunged into a near £9.0-billion loss last year on vast charges for litigation and the creation of a 'bad bank' division, it said Thursday. The lender, which is 81-percent owned by the government after a huge bailout during the global financial crisis, added it would seek to slash its cost base by another £5.3 billion in the coming years and warned of more "inevitable" job cuts. Losses after taxation ballooned to £8.995 billion in 2013. That compared with a loss of £6.055 billion in 2012, Royal Bank of Scotland (RBS) said in a results statement. The loss was sparked by a £3.8-billion provision for a string of scandal-related charges and a £4.8-billion hit for the creation of an internal "bad bank" unit called RBS Capital Resolution (RCR). Pre-tax losses jumped to £8.24 billion last year, from £5.28 billion last time around.  Revenues fell 12 percent to £19.44 billion. Despite the vast loss, the bank's staff bonus pool stood at £576 million last year, which was 15 percent lower than in 2012. Edinburgh-based RBS added it would cut costs by £1.0 billion this year, and would slash its total cost base from £13.3 billion in 2013 to £8.0 billion over the next five years. "Reducing costs and divesting businesses in the bank will inevitably result in reduced staff levels," said chief executive Ross McEwan in the earnings release. "We do not yet have detailed plans for implementation and as always we will deal with such matters sensitively, talking to our staff before communicating any such changes." Media reports had suggested last week that RBS was seeking a jobs cull totalling at least 30,000, but no specific numbers were given on Thursday. McEwan also outlined a plan to shrink the bank's seven divisions to just three, and simplify its services and products for retail customers. The bank had warned in January it would set aside more than £3.0 billion for litigation and compensation claims here and in the United States. RBS was rescued with £45.5 billion of taxpayers' cash at the height of the 2008 global financial crisis, making it the world's biggest-ever banking bailout. Former chief executive Stephen Hester earned the respect of the business community by axing 41,000 jobs, selling non-core assets and transforming the balance sheet at RBS, during his time at the helm. However, Hester left RBS last year, reportedly at the request of Britain's finance minister George Osborne who wanted a new face to help guide the bank's return to private ownership. In November, New Zealander McEwan had launched plans for the internal "bad bank" division in in order to run down £38 billion of high-risk assets.