Royal Bank of Scotland staff are facing further months of uncertainty as it has signalled the pace of its restructuring will remain high well into next year.
That came as RBS booked a £134 million operating loss in the third quarter of this year and warned it still faces significant litigation and misconduct charges in the future.
It warned those could be “substantially greater” than anticipated.
Along with industry wide redress issues such as payment protection insurance RBS is being investigated in the United States over claims it misled investors in mortgage backed securities.
A review into the bank’s treatment of struggling small businesses at its now disbanded Global Restructuring Group unit is also expected before the end of this year.
The bank has so far set aside around £4.5 billion to cover regulatory and legal actions.
Chief executive Ross McEwan confirmed RBS has cut between 900 and 1,000 jobs so far this year on top of the tens of thousands it has shed since the start of the financial crisis.
The New Zealand born banker confirmed RBS will continue to try to reduce its costs for the foreseeable future.
He said: “The days of global domination are over. Our focus is not to be the biggest, it is to be the best.
“This quarter sees us exceed our targets of taking £800 million of costs out of the business and we are now targeting a £900 million reduction this year.”
Mr McEwan claimed RBS is making good progress towards becoming a UK-focused and customer-centric lender.
Finance director Ewen Stevenson said the bank has now done £2.3bn of its proposed £5bn restructuring plan to 2019 in the first nine months of this year.
However he expects there to continue to be large restructuring charges for the next three quarters.
He said: “There is still a significant amount of restructuring to come through the corporate and institutional bank as we are trying to get out of 25 of the 38 countries we are in.
“What you seeing is going on is a significant transformation of the core banking operations in the UK and Ireland.
“We are actually adding staff to grow our UK personal bank at the moment.
“We are taking people out of the bank in the middle office through better process and group technology.”
According to Mr Stevenson Williams & Glyn, which RBS is having to sell as part of its bailout conditions, is also adding staff in order to set itself up for independence.
Mr McEwan defended RBS’s branch closures even after research published this week suggested it had closed more than any of its rivals in recent years, including many of the last branches in a town.
He pointed out RBS still has the second largest branch network in the UK with 1137 NatWest outlets, 175 Ulster Bank and 226 RBS, as well as a 30-strong fleet of mobile branch vans.
In addition he said when you include the Post Office outlets 90 per cent of RBS customers live within one mile of somewhere they can carry out every day banking.
Mr McEwan said: “We have seen a significant change in how people are banking and we have to respond to that.
“Less people are going in to branches, the roles of the branch is changing away from a transaction point into an advice and sales point.
“It is difficult though when you have very strong connecting points in communities which you can no longer see as viable operations.”
On an adjusted basis RBS saw third quarter net profit rise from £896m to £952m helped by a £1.1bn gain on the sale of US bank Citizens.
RBS confirmed it plans to sell its remaining 20.9 per cent stake in Citizens.
Mr McEwan said there was no scope yet to return to dividends or share buybacks any earlier than the first quarter of 2017.
New chairman Howard Davies said: “Since 2008, RBS has gone through a very difficult period and there are still quite a few obstacles to be overcome before we're back to full health.”
Analysts at Investec kept a buy rating on the stock in anticipation of a major capital return.
Shares in RBS closed down xxp, or xx per cent, at xxxxp.
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