In its annual results for 2008, the bailed-out bank revealed a £24.1bn attributable loss after tax, which stems from a £16.2bn goodwill write-down, as well as credit market losses and impairment losses.
As a result, the bank has had to call on the Government to inject another £13bn to help them access the Asset Guarantee Scheme £325bn, which will allow them to lend £9bn in mortgages and £16bn in SME lending.
The bank also revealed it will be shifting funded assets totalling £240bn into its newly created ‘bad bank’, which it will dispose of and run down over the next 3-5 years.
It also revealed it is set to split parts of its ABN Amro business away from the core of RBS, just keeping hold of ABN’s business units in North America, Asia and Europe, as well as global and wholesale clients in Holland and Latin America.
RBS group chief executive Stephen Hester says: “We have moved purposefully to take major decisions that are necessary to restructure the group. We are charting a path to standalone strength and with it the goal of justifying the support of the UK Government and all our shareholders.
“It is our job now to ensure that RBS moves forward. There are real and enduring strengths in the group illustrated by good performances across a range of businesses in a very difficult year. The restoration of the company’s health will be based around these powerful customer franchises.”
RBS is now looking at ways of restoring “standalone strength” back into the bank, including cutting more than £2.5 billion out of the Group’s cost base, centering business on the UK and restructuring GBM, taking out 45 per cent of capital employed.
Looking ahead, Hester says: “ We have many difficult decisions ahead of us and continued and major uncertainties in our markets. How we do business will be as important as the business we do as we navigate our way through these challenges. Everyone at RBS is now focused on the drive toward recovery”.