RBS reports £3.5bn loss as chief executive gives up £1m

Sir Howard, the former head of the now defunct Financial Services Authority, will be its chairman from September, the bank announced on Thursday. He replaces Sir Philip Hampton, who is set to join GlaxoSmithKline.

The company’s bonus pool was cut by 21 per cent to £421m for 2014, while chief executive Ross McEwan said he will not take a £1m “role-based” incentive, which is paid on top of salaries by some banks. Mr McEwan also declined to take an annual bonus last year.

‘Ethical standards’

In a letter to Sir Howard, Chancellor George Osborne called on the new chairman to ensure the bank’s business is “conducted to the very highest ethical standards”.

He wrote: “Given the extraordinary support it has enjoyed in the past from taxpayers, I know you recognise that RBS must remain a backmarker on pay and continue to show responsibility and restraint.”

RBS CEO, Ross McEwan says (essentially) were it not for all this mess underneath we’d be a great bank pic.twitter.com/kyLjaEAlWY”

— siobhan kennedy (@siobhankennedy4) February 26, 2015

Since its rescue from the brink of collapse in 2008, RBS has focused on offloading many of its foreign and investment banking assets to become a more UK-focused bank centred on retail and commercial banking.

Losses

RBS said the latest loss was attributable to a £4bn write-down on the value of its US arm Citizens, having recently cut its stake in the business.

Operating profits were £3.5bn – the highest since 2010 – as RBS said it had made significant progress towards building a bank that is “stronger, simpler and better for both customers and shareholders”.

Other one-off items included £2.2bn of conduct and litigation charges, including £320m in the fourth quarter relating to the rigging of foreign exchange markets and a further £400m to cover compensation for the mis-selling of payment protection insurance.

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