RBS – still a long and winding road

The latest figures published by the RBS Group make for sobering reading.

The bank's pre-tax loss for 2013 was £8.2bn, compared with £5.2bn in 2012. In 2008 RBS posted the worst loss in UK corporate history of £24 billion.

The average share price paid by the government in 2008 was 500p with the current price languishing around 320p.

According to the head of RBS he estimates it will take a further three to five years for the bank to recover.

The strategy would now appear to focus on a "back to basics" approach.

This will see the group offering simpler retail products, cutting the length of time it takes to set up a current account, and rewarding the loyalty of existing customers, rather than offering "sweeteners" to new customers.

In a nutshell RBS are attempting to reposition themselves to offer a service based business where the customer feels valued.

However, there is still the hangover of the bonus culture which many would argue was one of the major factors which necessitated the UK Government stepping in and saving the Bank in 2008.

Despite 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.

So whilst the management claim that they have identified a strategy to take the Group forward and in doing so offer some comfort to its shareholders (primarily the UK tax payer) it is still open to the charge of rewarding failure.