The boss of the Royal Bank of Scotland said the “heaviest restructuring” of the bank will be behind it by the end of the year as it presses ahead with cost-cutting plans.
Chief executive Ross McEwan told shareholders at the bank’s annual general meeting that it will be able to focus on targeting “attractive, balanced and sustainable financial returns” in 2017.
But he said the bank will need to find £800 million worth of cost savings this year, as it looks to adapt to an environment where “interest rates look set to stay lower for longer and where the macroeconomic outlook remains uncertain.”
He said: “A cost to income ratio of 72%, as it was for 2015, is simply too high. My intention is to get the cost base properly aligned to the bank we are becoming, not the global bank we once were. And we are making real progress in becoming simpler.”
It comes after RBS reported a first-quarter pre-tax loss of £968 million last week - more than double last year’s figure of £446 million.
The loss reflects the impact of its £1.2 billion payment last month to the Treasury to buy out a crucial part of its £45 billion bailout.
It has also warned that it will take a ‘’significantly’’ greater-than-expected hit from plans to spin-off its Williams & Glyn arm and revealed it may not meet its deadline to offload the business.