RBS sets aside £2.5bn in mortgage and PPI provisions

RBS is making an additional provision of £1.5bn relating to US mortgage-backed securities, 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 also making an additional provision of £500m on PPI, taking total incurred costs and future provisions to £4.3bn.

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).

RBS has also confirmed that it is putting £4.2bn into its pension scheme, to cover an accounting deficit of £3.3 billion.

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.”