Royal Bank of Scotland Group Plc posted its biggest full-year loss since its bailout, marking the companys sixth straight year in the red. As reported by Bloomberg, Ross McEwan, RBSs Chief Executive Officer, is making plans to make the lender once again profitable.
Royal Bank of Scotland Group Plc made an official statement, revealing that its 2013 pre-tax operating loss amounted to 8.2 billion pounds, missing the median estimates of analysts surveyed by Bloomberg for a 5.28-billion loss. The net loss of the company was reported to have increased from 6.1 billion pounds for the same period in 2012 to 9 billion pounds (15 billion dollars) in 2013 after about 12 billion pounds in charges for impairments, customer compensations and legal expenses were logged by RBS.
The current Chief Executive Officer of Royal Bank of Scotland Group Plc – Mr. Ross McEwan, who took over the position in October 2013, described last years performance of the bank as “certainly sobering.” As reported by the Financial Times, he said: “This is a huge loss. Its driven by pre-crisis issues but lets not pretend its anything but huge.”
Mr. McEwan is now making an attempt to increase the profit of RBS after the six years of losses, which are estimated to about 46 billion pounds, by leaning the banks structure through layoffs and unit mergers. Currently Royal Bank of Scotland Group Plc has seven operating divisions, which are planned to be combined into three main businesses – personal and business banking, commercial and private banking, and corporate and institutional banking.
Mr. Edward Bonham Carter, Chief Executive Officer of Jupiter Fund Management Plc, said in an interview, which was cited by Bloomberg: “The key challenge for them is how to return to profitability to allow themselves then to normalize their ownership structure. The issue for them through their reorganization is how to reduce the size of the balance sheet, which they have started. They have to simplify their structure.”
Royal Bank of Scotland Group Plc plunged 8.11% by 12:41 GMT in London to 325.10 pence, marking a one-year change of -6.17% and slashing the lenders market capitalization to 40 billion pounds. According to the Financial Times, the 26 analysts offering 12 month price targets for Royal Bank of Scotland Group Plc have a median target of GBX 324.00, with a high estimate of GBX 470.00 and a low estimate of GBX 210.00. The median estimate represents a -8.47% decrease from the last close at GBX 354.00.
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