RBS chief says he won’t accept share award amid losses
LONDON (AP) — Royal Bank of Scotland Chief Executive Ross McEwan rejected a 1 million pound ($1.6 million) share award amid continuing losses at the U.K. taxpayer-owned bank.
RBS on Thursday reported a net loss of 3.5 billion pounds for last year, compared with 9 billion pounds in 2013. The results include a 4 billion pound write-down on Citizens Bank, which RBS plans to shed by the end of 2016.
Bailed out by the British government in 2008, RBS is struggling to put the excesses of the past behind it, including an ill-fated global expansion drive. The results include 2.2 billion pounds of charges for resolving litigation and regulatory issues, as well as 1.5 billion pounds of restructuring costs.
“It has taken far longer than anyone realized to root out all the past problems, practices and related fines, and we still have challenges on the horizon,” McEwan said in a statement. “We are changing the culture of this bank; our aim is that shareholders are not exposed to this scale of conduct risk.”
RBS said efforts to shrink the bank and simplify its structure are beginning to pay off. Operating profit, which excludes the one-time charges, was 3.5 billion pounds compared with a loss of 7.5 billion pounds in 2013. Some 80 percent of the bank’s revenue now comes from the U.K., up from 48 percent in 2008.
The bank has reported losses for seven years in a row, and the results show it may be some time before the government can consider putting its share on the market.
McEwan said he rejected the share award so that his compensation doesn’t distract attention from RBS’s progress toward making the bank “stronger and simpler.” Such “role-based” share awards are payments European banks use to get around European Union limits on bonuses for top bankers.
The bank cut its bonus pool by 21 percent to 421 million pounds last year.
RBS said it has completed its reorganization from seven operating divisions to three and reduced costs by 1.1 billion pounds.
It plans to continue shrinking the corporate and investment banking unit, reducing operations to 13 countries from 38 at the end of 2014. RBS also plans to reduce the unit’s balance sheet and risk.
The bank confirmed that Howard Davies would become chairman after he wrapped up his work with the U.K. Airports Commission. Chairman Philip Hampton plans to step down Sept. 1.