The group’s results, which included Ulster Bank but dropped out Williams & Glyn, also reported a 10% increase in the net mortgage balance to £9.3bn.
However, the bank noted the pressure on mortgage lending margins as customers shifted from variable to fixed rate products. The bank reported a 21% increase in mortgage adviser numbers, up from 803 to 974 and launched an online mortgage tracker last year.
This is the group’s eighth annual consecutive loss after taking a £6.5bn hit from conduct, litigation and restructuring costs further delaying the prospective sale of the lender, which is still 73% state-owned.
The bank’s £2bn losses for 2015 are worse than analyst estimates of £1.8bn. Underlying profits at the bank also plummeted to £4.4bn, from £6bn a year earlier.
Following a massive restructure separating the Northern Irish and Republic of Ireland arms, Ulster Bank is also seeing stronger lending volumes due to the improving economy. Gross new mortgage lending increased 53% to £0.5 bn in 2015.
But the shadow of further US litigation continues to hang over the bank, noting in its results: “Although we have put aside substantial provisions for mortgage-backed securities litigation claims we have not provided for the Department of Justice and state Attorneys General investigations.
“It is not possible at this point to forecast when these claims and investigations will be resolved or at what ultimate cost but further substantial provisions may be required.”
The Board has also overseen the response to the action raised by the 2008 rights issue Shareholders Action Groups. That case is unlikely to come to court before the end of 2016.
Howard Davies, chairman, RBS said: “What I can say is that the future shape of the bank is now far clearer than it was a year ago. We are well on the way to exiting the non-core elements of the business, and the divestments are proceeding well.”
He added: “We can also see signs of progress in the core business, especially in the mortgage market, though all retail and commercial banks find a very low interest rate environment one in which margins and profits are under pressure.”
