Royal Bank of Scotland made a pre-tax loss of £5.2bn in 2012, compared to a £1.2bn loss in 2011.
This is due in part to the significant sums the bank set aside for the misselling of payment protection insurance and interest rate swaps.
Last year, RBS made a further £450m provision for PPI misselling, bringing the total set aside for PPI redress to £2.2bn. So far, £1.3bn has been paid to consumers.
In Q2, RBS set aside £50m for interest rate swaps misselling, however it was forced to allocate a further £650m in Q4 following the development of the FSA’s redress framework for swaps.
The accounts show RBS paid £381m in regulatory fines in 2012, due to Libor rate-rigging, and the accounts say the bank expects to “incur some additional financial penalties”.
It also estimates the cost of its technology failure last year hit £175m.
RBS’s UK retail arm made a £2.4bn pre-tax profit, compared with a £2.8bn in 2011.
During 2012, RBS advanced £16bn of UK home loans, including £3bn to first-time buyers. It estimates around 4,000 customers have benefited from lower mortgage rates as a result of the bank’s participation in the Funding for Lending scheme.
It says its entire loan book is now funded by retail deposits.
The bank says it now has a 10 per cent share of the mortgage market. Its market share has hovered between 10 per cent and 14 per cent over the past two years.
The bank’s core tier 1 ratio increased to 10.3 per cent, up from 9.7 per cent in 2011.
Group chief executive Stephen Hester says: “RBS is four years into its recovery plan and good progress has been made. We are a much smaller, more focused and stronger bank. Our target is for 2013 to be the last big year of restructuring.
“There will be important work still to do, but an increasingly sound base from which to work. As the spotlight shifts to the ‘new RBS’ post restructuring, we are determined that it will show a leading UK bank striving to be a really good bank. By serving customers well RBS can become one of the most respected, valued and stable of banks. That is our goal.”