RBS to wipe out profit with US bank writedown

Royal Bank of Scotland is likely to write down the value of its US bank, Citizens by about £4bn (€5.4bn) next week, industry sources said, potentially wiping out much of the state-backed bank’s annual profit.

The writedown of goodwill would be because the US bank is not worth as much as RBS paid for it, and serves as another reminder of the hefty price paid for past acquisitions by former chief executive Fred Goodwin.

RBS, 80% owned by the UK government after being rescued in 2008, sold 29% of Citizens Financial Group in September and is expected to reduce its stake to about a third this year, which would mean Citizens being deconsolidated from RBS Group.