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Royal Bank of Scotland announced that it made a pre-tax loss of £5.2 billion for 2012, during what it described as a 'chastening' year.
Despite a rise in annual operating profits, from £1.82 billion in 2011 to £3.46 billion last year, the state-owned bank has been stung by financial penalties arising from a spate of scandals.
The bill for compensating victims of payment protection insurance mis-selling has now exceeded £2 billion, with a further £700 million set aside to cover interest-rate swaps to small businesses.
Meanwhile, the bank was recently fined £390 million by UK and US regulators over its involvement in the Libor rate-rigging scandal (read more).
Despite the losses, boss Stephen Hester said that he hoped the Government would now sell its shares in the bank to allow it to finalise its restructuring process.
The 83% stake was funded by the taxpayer as part of a bailout in 2008.
Mr Hester said that the re-privatisation of the bank was almost within reach.
RBS almost ready for re-privatisation despite losses, says CEO Stephen Hester.
The bank was “much closer now to being in the good financial health that would allow shareholders to receive a dividend and the Government to start to sell its stake,” he said.
Since becoming chief executive of the bank, Mr Hester has concentrated on downsizing the bank’s investment arm and extraneous areas of the business.
The sale of the bank’s aircraft leasing operation, RBS Aviation, raised over £4.5 billion. Also gone are Hoare Govett, the corporate broker, and payment processing system WorldPay.
“The clean up of RBS is entering its last phases and I am hopeful that as we go past 2013 and into 2014 it will look much more like a normal company,” he added.
“We are determined that it will show a leading UK bank striving to be a really good bank.”
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