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Ross McEwan: "We are the least trusted company in the least trusted segment in business"
Shares in Royal Bank of Scotland (RBS) have fallen sharply after the troubled bank reported its biggest annual loss since being rescued by the UK government during the financial crisis.
The bank's pre-tax loss for 2013 was £8.2bn, compared with £5.2bn in 2012.
Its shares were down by more than 9% to around 320p. The average price paid by the government in 2008 was 500p.
Ross McEwan, RBS's newly appointed chief executive, told the BBC the results were "very sobering".
The fall in RBS's share price has wiped almost £2bn off its stock market value.
"It's another reminder that we're six years on from the onset of this, and they're still paying for it more than ever," said Toby Morris, senior sales trader at CMC Markets.
"We're so far from being out of the other side of the tunnel with this stuff, it's unbelievable."
Mr McEwan also announced that the banking group would be restructured, with an increased focus on lending to small business and retail banking in the UK.
Its seven operating divisions will be transformed into just three customer businesses: personal, commercial and corporate.
William Wright, a consultant at New Financial, told the BBC the bank had "shrunk by nearly half" and had shed a section of its business equivalent to the size of Lloyds.
'Least trusted'Talking to the Today programme, Mr McEwan said it would take three to five years for the bank to recover.
"People - including the executives of the bank - didn't realise how big a change process we had to go through to get this bank back into shape," he said.
He added that RBS would now work on getting "back to good old banking where we have trust with people".
"We're in the least trusted industry and we're one of those banks that aren't trusted."
In a letter to shareholders, RBS said "cleaning up a £2.2 trillion balance sheet whilst addressing the many failings of the past" had taken its toll on the bank, but insisted it would be in better health by 2016.
'Smaller, simpler'Mr McEwan also announced that RBS, once one of the world's largest banks, would now work on shrinking its operations, focusing less on its international operations, and more on getting the "basics of everyday banking right".
Continue reading the main storyMr McEwan said he plans for RBS to become the "the number one bank for customer service and the most trusted bank in the UK" by 2020.
The bank's cost-to-income ratio currently stands at 73%, but RBS has set a target of getting this down to about 55% by 2017.
"This year, that will mean cutting around £1bn of operational spend on things that don't help our customers," a statement confirmed.
'Pragmatic' bonusesDespite the increased loss, RBS set aside £576m for staff bonuses in 2013, a drop of 15% on 2012. Of that sum, £237m went to investment bankers.
Mr McEwan defended the bonus pool, arguing that attracting the most talented staff was essential. The best employees, he warned, were constantly being "tapped on the shoulder" by other institutions.
A spokesman for trade union Unite said the awards represented an "astonishing betrayal" by RBS, given the scale of losses incurred.
Rob MacGregor said the bonuses were "a state-sponsored grab by greedy senior bankers".
He added that Chancellor George Osborne had given RBS "the green light to indulge in grotesque levels of corporate greed in the midst of historic losses".
Former RBS chairman Sir George Mathewson told Radio 5 live staff were being rewarded for making an operating profit of £2.5bn, once costs relating to previous errors by the bank were taken out of the equation.
But he said he was "not a proponent of a bonus-driven culture" and that it was difficult being "in market places where the competition is prepared to play that type of game".
'Reduced staff levels'The company's results come a week after UK newspapers speculated that thousands of jobs would be cut at the bank over the coming year.
RBS has not confirmed how many positions will be lost, but Mr McEwan said that reducing costs would "inevitably result in reduced staff levels".
"We do not yet have detailed plans for implementation," he added.
"We will deal with such matters sensitively, talking to our staff before communicating any such changes."
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