Royal Bank of Scotland produced a better than expected result with a £3.6bn loss for last year.
The loss is an improvement from a £24.3bn loss in 2008, and many commentators had been predicting losses of £5bn for 2009. Chairman of the bailed-out bank Philip Hampton says the losses were driven by the legacy of actions taken in the past, for which responsibility has been allocated.
Group chief executive Stephen Hester says RBS’s progress in 2010 depends on the pace of economic recovery, prospective regulatory change and the improvement of impairment losses and write-downs. He adds: “We see the outlook as cautiously encouraging, although with clear risks. It looks as if loan impairments may have peaked in 2009 and our net interest margin, despite continued squeeze on liability margins and higher liquidity costs, has now shown two quarters of improvement. Our progress in 2009 gives increased comfort in our ability to execute the restructuring challenges that remain.”
The UK taxpayer owns 84 per cent of RBS after the Government bailed out the bank in 2008. UK Financial Investments, which looks after the Government stakes in the banks, has approved RBS’s bonus pool, which is understood to be in the region of £1.3bn. Earlier last week, group chief executive Stephen Hester waived his £1.6m bonus.