United Kingdom shares extended gains for a second session on Friday, boosted by a rally in commodities stocks and hopes of a profit recovery in publisher Pearson, though Royal Bank of Scotland reported its eighth full-year loss in a row.
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The company’s bonus pool was cut by 11% to £373 million for 2015, while chief executive Ross McEwan said he will not take a £1 million “role-based” incentive, which is paid on top of salaries by some banks.
For the year, losses narrowed to 1.98 billion pounds, compared to 3.47 billion pounds for 2014.
Sports Direct fell 2.6 percent after Britain’s biggest sportswear retailer said it was facing higher borrowing costs after deciding it will no longer use a loan facility provided at favourable rates by billionaire founder Mike Ashley.
That included £2.1bn of additional provisions for mortgage backed securities litigation in the U.S. and an extra £600m of provisions relating to PPI.
Once the world’s largest bank, RBS was bailed out during the 2008 financial crisis and has been posting annual losses ever since.
The bank said it amassed restructuring costs of £2.9 billion previous year, as it sells off its investment banking and overseas operations to become a smaller and less complex lender. We ended the year a simpler, stronger bank with a business anchored squarely in the United Kingdom and Ireland, focused on retail and commercial markets.
“But I think we are making very good progress and I’m pleased with what we did a year ago on restructuring the bank, getting costs out and getting ourselves focused back on customers”.
The additional provision for United States mortgage legal action took its total to £3.8 billion, but further hefty charges are expected as the bank nears a settlement with authorities in the US.
In January this year, however, Mr Osborne suspended the Government’s final stake in Lloyds Banking Group, of just under 10%, due to the market turmoil.
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RBS is around 73-per cent owned by the British government after the vast state-rescue.
