£446m Q1 loss as forex and restructuring costs hit RBS

The 80 per cent state-owned lender said results were impaired by the setting aside of provisions for a further £334m in the wake of allegations about foreign exchange manipulation.

According to the bank latest figures, the first three months of 2015 saw it set aside a total of £856m for litigation and conduct issues, plus £453m for “restructuring costs”.

This includes £334m for forex investigations and litigation, and a further £100m for payment protection insurance misselling.

RBS has also made a provision of £257m for customer complaints about certain bank account and £176m for US legal action over the sale of mortgage-backed securities.

In November RBS was fined £217 million by the FCA for forex failings, alongside four other banks. RBS remains in discussions with other regulatory authorities over the conduct.

The bank reported operating profit of £325m in the first three months of the year, down from £1.3bn in Q1 2014.

Excluding the charges, adjusted operating profit rose 16 per cent to £1.63bn as RBS benefited from “generally benign credit conditions”.

The bank said it was making good progress towards its targets for 2015 and creating a “stronger, simpler” business.

RBS was one of six banks fined a total of about £2.8bn for failing to stop traders trying to manipulate currency markets last year.

This week, one of them, Barclays, which has yet to reach a deal with regulators over the forex allegations, set aside another £800m to cover the issue.

RBS has already paid £399m in fines to US and UK regulators over the scandal.

Ross McEwan, chief executive, said there were “still many conduct and litigation issues on the horizon” for the bank.

“We need to make sure what we are doing today is not making new conduct issues,” he said, adding: “Many things that are fresh are still looking back to 2008-09.”

Revenue for the first quarter was £4.33bn – 14 per cent lower than the same period in 2014, but 12 per cent higher than the final three months of last year.

In February, RBS reported a loss of £3.5bn for 2014 - less than half the £9bn loss for the previous year.

Shares in RBS fell 2.6 per cent to 340.6p in morning trading in London, bringing the slide in the stock to more than 13 per cent this year.