The private banking business of RBS has registered an adjusted operating profit of £113m for the full year ended 31 December 2015, down 40% compared to £190m a year ago reflecting lower income and higher impairment losses.
The unit posted an operating loss of £470m in 2015 compared with an operating profit of £99m in 2014 driven by a goodwill impairment charge of £498m.
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The private banking total income was £644m, down 6.5% from £689m a year earlier. Net interest income declined 4% to £436m from £454m a year ago primarily due to lower net interest margin.
Non-interest income totalled £208m, a decrease of 11% from £235m in 2014 driven by lower investment and transactional income as the business adjusted pricing to reflect a more competitive market.
For the year ended 31 December 2015, operating expenses of the unit increased to £1.01bn from £595m a year earlier.
This rise was driven by a goodwill impairment charge of £498m, and considerably higher restructuring costs of £73m which included a share of an asset write down related to software of £91m, and lower litigation and conduct costs of £12m.
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By GlobalDataAdjusted operating expenses were up 3% to £518m with reductions in the direct cost base offset by a higher UK bank levy charge.
The unit’s net impairment losses reached £13m, compared with a release of £5 million, due to higher individual and latent charges.
The division’s assets under management and net loans and advances to customers were broadly stable compared with the prior year despite challenging market conditions.
The British banking giant has reported an attributable loss of £1.98bn in 2015, compared to a loss of £3.47bn in the prior year. The bank posted a loss of £2.72bn in the year from continuing operations, compared to a profit of £734m in 2014.
Litigation and conduct costs increased to £3.57bn from £2.19bn a year ago, while restructuring costs increased to £2.93bn from £1.15bn a year ago.
RBS CEO Ross McEwan said: "We are delivering our eighth consecutive quarter of capital ratio growth. When I took over as CEO our capital ratio was 8.6%, today it sits at 15.5%. We are becoming much simpler, taking £983m of costs out of the business this year and over £2bn in the last two years."
