RBS CEO Ross McEwan said:
“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.”
- RBS has announced a revision of its pension accounting policy, which will result in a liability, to comply with guidance published by the International Accounting Standards Board to IFRIC 14.
- The management of RBS has also signed a Memorandum of Understanding with the trustees of its main pension scheme to accelerate the schedule of future payments intended to close the pension deficit by making a lump sum payment in Q1 2016.
Conduct and litigation
- RBS is making an additional provision of £1.5bn relating to US mortgage-backed securities (RMBS), taking total provisioning to £3.8bn. This does not include any amount relating to Department of Justice or US Attorneys investigations.
- Following guidance from the FCA on time-barring and Plevin, RBS is making an additional provision of £500m on PPI, taking total incurred costs and future provisions to £4.3bn. On current assumptions and modelling RBS believes that this additional provision is sufficient to cover claims through to the FCA proposed deadline date of Q1 2018, subject to any further guidance changes.
- Following year end impairment testing, RBS has decided to take a £498m goodwill writedown on its Private Business. This reflects new reporting lines and some reductions in the view on future profitability of the business (including higher corporate tax charges, lower for longer interest rate environment).
The total impact of these actions will be to reduce our expected FY CET capital 1 ratio by around 160 basis points and we expect our CET capital 1 ratio will be approximately 15% as at 31 Dec 2015.
Conference call replay
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Media call transcript [PDF 303KB]