Royal Bank of Scotland racked up its eighth year in a row of annual losses after recently setting aside billions for expected fines and misconduct charges.

The group, which is 73 per cent owned by the taxpayer, posted a loss of £2 billion, although this is down on the £3.5 billion deficit it reported a year earlier. The company’s bonus pool was cut by 11 per cent 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.

Mr McEwan also added that in 2016 he will give half of his role-based pay to charity in a bid to defuse what has become an annual pay row at the taxpayer-backed lender.

It will be the third year in a row that the New Zealander, whose base salary is a £1 million a year, will have voluntarily forfeited part of his pay package. The losses at RBS come after it said last month it would set aside billions to cover past mistakes as part of a raft of mammoth financial provisions.

The bank said it has set aside £3.6 billion in conduct charges. This includes £2.1 billion to cover expected legal action on US residential mortgage-backed securities, as well as £600 million extra for payment protection insurance (PPI) mis-selling compensation.

Reuters