Feb. 27 - Royal Bank of Scotland has launched a campaign to transform itself from pariah to trusted British lender by slashing costs and repositioning itself as a UK-focused retail and commercial bank. But as Ivor Bennett reports many believe it could be years before it can return to private ownership.
To call it a charm offensive is an understatment. RBS is a bank in trouble, and CEO Ross McEwan knows it - hoping it's true what they say about admission being the first step to recovery. SOUNDBITE (English) ROSS MCEWAN, CEO, ROYAL BANK OF SCOTLAND, SAYING: "We are the least trusted company, in the least trusted segment in business in this economy. That must change." Admitting you have a problem's said to be the first step to recovery. But RBS may need more than that. The bank's posted an 8.2 billion pound loss for 2013 - 3 billion more than the year before, and the biggest pre-tax loss since 2008. That was when the bank was bailed out, and it's still 81 percent owned by the public. McEwan's said he wants to win back public opinion, but he faces a tough task. SOUNDBITE (English) IVOR BENNETT, REUTERS REPORTER, SAYING: "In the 6 years since the bailout, the bank has lost 46 billion pounds. Yet despite the bumper losses, it's still been paying out bumper bonuses - last year, to the tune of 579 million pounds." Formerly one of the world's largest banks, the plan now is simplification. It wants to cut costs by 5.3 billion pounds over the next three years, shrinking its international operations to concentrate on the UK. Barclays' Will Hobbs. SOUDNBITE (English) WILL HOBBS, VP ECONOMICS AND STRATEGY, BARCLAYS, SAYING: "Whether it's a good strategy or a bad strategy, that's open to plenty of interpretation. But I think what's important is to have an idea of where you want to be and what markets you want to operate in. Rather than being weak in some markets and continuing to operate in them." For now though things are set to get worse before they get better. RBS shares plunged nearly 9 percent in morning trading, to around 325 pence. The average price paid by the government was 1 and a half times that.