13th Feb 2014 10:17
LONDON (Alliance News) - Royal Bank of Scotland Group PLC was placed on review for downgrade by Moody's Investors Service Wednesday, just over two weeks after the bank said its results for 2013 will include new provisions of GBP3.07 billion relating to past conduct.
"RBS's recent announcement demonstrates that its management faces a number of short-term headwinds, which could challenge the implementation of this plan and in turn be negative for its creditors," Moody's said.
The bank, which is 81%-owned by the UK government after it needed a GBP45 billion bailout in the midst of the financial crisis, is setting aside the new provisions in order to deal with legal costs because of costs arising from mortgage-backed securities and securities it sold before 2008, the PPI mis-selling scandal, as well as the mis-selling of complex derivatives products to small-and-medium-sized enterprises, and other legal expenses.
RBS will report its results for 2013 on February 27, when Chief Executive Ross McEwan is set to unveil new plans to cut costs and speed up the bank's recovery.
RBS hasn't made an annual profit since 2007, the year before it took huge writedowns on its disastrous acquisition of Dutch bank ABN Amro that resulted in a GBP24.14 billion loss for 2008.
RBS shares were Thursday quoted at 339.80 pence, down 6.90 pence, or 2.0%.
By Samuel Agini; [email protected]; @samuelagini
Copyright © 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
RBS.L