Why such big losses at RBS while Lloyds performs well?

Answers to some key questions on a mixed set of results from Britain’s biggest banks. So, why is Lloyds performing so well while RBS remain firmly in the doldrums? Prior to the financial crisis, RBS expanded globally, holding US operations and buying up Dutch bank ABN Amro in 2007, resulting in a precarious capital position when the crunch came. Lloyds, meanwhile, was domestically focussed and its problems stemmed from bad commercial property loans and its takeover of HBOS. In short, RBS started with bigger issues than Lloyds at the time of their respective bailouts. Q Why is RBS still so deep in the red?

A RBS continues to be hamstrung by fines, restructuring costs and EU rules on state aid. The group’s results were hit after it set aside another 3.8 billion US dollars (£3.1bn) ahead of an expected settlement from US authorities and the group has been mired in controversy over its treatment of struggling businesses. RBS also failed Bank of England stress tests late in 2016. But there is some hope that it may be able to clear one major hurdle that has been looming large, as the Treasury holds talks to spare RBS from selling its Williams & Glyn branches. The process has been expensive and beset by problems, so any alternative would be welcomed by the bank. Q How did the other major banks fare last year? A Barclays seems to be well on the path to recovery with group profits nearly trebling last year. But HSBC is still paying for its mistakes, as it is facing a UK investigation over financial crime controls and remains under pressure from US authorities after its £1.2bn US money laundering fine nearly five years ago.