The Royal Bank of Scotland Group (LON:RBS) saw shares fall this morning, after a trading update revealed that it would take an unexpected £2.5 billion hit to fourth quarter profits.
The profits were hit as more cash than expected was set aside for compensation and litigation costs surrounding mis-sold loan insurance, as well as an impairment charge at its private banking arm. RBS CEO Ross McEwan said in a statement:
“I am determined to put the issues of the past behind us and make sure RBS is a stronger, safer bank. We will now continue to move further and faster in 2016 to clean-up the bank and improve our core businesses. We’ve always been open about the scale of past issues facing RBS and although there is clearly much more to do, this announcement is a further step towards addressing legacy issues and building a great bank for our customers and delivering long term value for our shareholders.”
McEwan is in the process of turning the troubled lender around so that the government can sell more of its 73 percent stake in the Group, which it took after its near-collapse in 2008.
RBS shares fell nearly 3 percent just after open this morning, and is now trading down 2.67 percent at 254.60.
