The Royal Bank of Scotland (RBS), which is 80% owned by the state, has announced that it is set to focus on UK customers and the economy. The move comes after the bank has faced criticisms and losses.
According to the Telegraph, chief executive Ross McEwan will deliver a strategy review, which is likely to place UK retail banking at the centre, on Thursday. The decision is also likely to see RBS’s international exposure be reduced and limited.
Speaking to the newspaper, a senior RBS source said the changes are aimed at showing customers that the bank is trying to take action on issues in the wake of the financial crisis, something that many financial institutions have attempted to do. They said, “Ross is trying to make it meaningful, rather than just with words.”
Last month it was revealed that the bank is facing full year losses of around £8 billion, leading to criticisms from business secretary Vince Cable who labelled the situation as “absolutely shocking”. The shortfall comes from £1.9 billion being channelled towards litigation costs, £650 million being set aside for payment protection insurance (PPI) mis-selling claims and expected £500 million costs incurred after the bank was involved in rigging rates.
RBS was dealt a £390 million fine last year for its role in fixing the Libor rate. It was also forced to pay fines of £5.6 million and £61 million for inaccurate transaction reporting and violating sanctions in the US respectively.
The fines have led to intense criticisms of the bank’s operations, although McEwan has maintained the losses and problems arise from bad decisions made prior to 2008.