RBS Shares Drop After Surprise Pension Charge Cuts Capital
- Bank takes 500 million-pound charge tied to PPI claims
- RBS still expects capital distribution early 2017, CFO says
RBS Takes 500 Million-Pound Charge Tied to PPI Claims
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Royal Bank of Scotland Group Plc dropped after the bank took a surprise 3.6 billion-pound ($5.2 billion) hit to the value of its assets and set aside more money for past misconduct, limiting Chief Executive Officer Ross McEwan’s ability to return capital to shareholders.
Measures to plug a pension deficit will hurt the tangible net asset value by 1.6 billion pounds in the fourth quarter, RBS said in a statement on Wednesday, a month before its scheduled full-year earnings. It also took a 1.5 billion-pound charge tied to a U.S. mortgage-backed securities lawsuit and 500 million pounds for wrongly-sold payment protection insurance, pushing it into a full-year loss for 2015.