RBS braced for yet another year of loses after £3.6bn write-downs

The Edinburgh-based lender said the provisions were driven by a multi-billion pound payment to its pension scheme.

However, in a statement, RBS, which was bailed out by the taxpayer at a cost of £45 billion at the height of the financial crisis, said it was setting aside another £500m to pay for PPI and £1.5bn for bad housing debts in the US.

Lawyers for the bank are in talks with the US authorities to settle accusations that RBS sold toxic mortgage-backed bonds in the years before the financial crisis.

In addition, RBS said it will write down £498m from its private bank Coutts.

Today’s statement also outlined that changes to accounting rules on funding defined benefit pension schemes mean the bank is bringing forward future pension contributions totalling £4.2bn.

It says the net impact of paying these contributions early is £1.6bn.

The bank, which has failed to make an annual profit for seven years, is due to announce its results on 26 February.

Chief executive 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.”

“Based on what we know today, hopefully this is the final provision. Hopefully it is the end… this is it,” he added.