Royal Bank of Scotland reported a £2bn loss in 2015 amid restructuring charges and costs linked to conduct failures.
However, losses were lower than in 2014 when the taxpayer-backed bank hemorrhaged £3.47bn.
Litigation costs included £600m more in provisions for the payment protection insurance misselling scandal, while restructuring costs came in at £2.9bn.
When these costs are stripped out, the bank delivered operating profit of £4.4bn versus £6bn in 2014.
RBS says: “The group is subject to a number of legal, regulatory and governmental actions and investigations. Unfavourable outcomes in such actions and investigations could have a material adverse effect on the group’s operations, operating results, reputation, financial position and future prospects.”
It adds: “In the past eight years, the group has dramatically downsized and simplified the scale and complexity of its operations as compared to its operations preceding and during the financial crisis.
“However, the group’s operations remain diverse and complex, and the group operates in legal and regulatory environments that expose it to potentially significant litigation, civil and criminal regulatory and governmental investigations and other regulatory risk.”
Reconstruction costs will remain high in 2016 and are expected to reach £1bn during the year.
Despite these losses RBS chief executive Ross McEwan has been awarded more than double his pay of 2014, when he took home £1.8m. His total pay, including bonus and benefits package, comes in at £3.8m for the year. Part of this increase is due to a long-term incentives plan from 2013 paying out.
Included in McEwan’s salary is £1m in pay, £1m in a fixed share allowance, £350,000 in pension, plus £1.3m in a long-term incentive award.