Big week for banks as market looks to RBS report

BRITAIN’S BIGGEST banks will reveal annual figures this week after another eventful year for the sector, clouded once more by mis-selling scandals and controversy over past misdeeds.

The performance of statebacked Royal Bank of Scotland, which reports on Friday, will hinge on whether the lender is hit by a pending settlement with the US Department of Justice over claims it mis-sold risky mortgagebacked securities in the run-up to the financial crisis.

Further provisions or a final settlement included in the results could push the bank to yet another annual loss, which would mark a full decade in the red.

Consensus figures point to a full year attributable loss of £592m, with conduct and litigation costs expected to come in at £2.7bn.

Michael Hewson, chief market analyst at CMC Markets, said: “RBS management have been careful to downplay the prospect that we could see the first annual profit in this particular decade, probably a wise course of action given the bank’s current woes.

“It still hasn’t settled its issues with the US Department of Justice over mortgage-backed securities mis-selling.

“The bank may choose to set aside further provision to help cushion the final settlement into next year’s numbers, with the fine rumoured to be in the region of 10 billion US dollars.”

Piling on the misery for RBS is its controversial restructuring arm GRG, which has come under intense scrutiny in recent weeks and could feature again in the form of further provisions.

The lender, 72 per cent owned by the taxpayer, has already set aside £400m to refund customers who were mistreated by GRG.

RBS could also take an impairment charge on the back of Carillion’s collapse.