Royal Bank of Scotland said it made an attributable loss in 2016 of £6.95 billion which included litigation and conduct costs of £5.87 billion and restructuring costs of £2.1 billion.

RBS said its core businesses of personal and business banking, commercial and private banking, and NatWest Markets reported adjusted operating profit of £4.25 billion, up 4%.

“In 2016 RBS made an attributable loss of £7 billion, mostly reflecting charges for outstanding litigation and conduct, and costs associated with restructuring of the bank,” said RBS CEO Ross McEwan.

“The financial impact of these issues is a difficult but necessary step in working through the bank’s legacy issues.

“These costs are a stark reminder of what happens to a bank when things go wrong and you lose focus on the customer, as this bank did before the financial crisis.

“The more progress we have made on clearing these past issues, enables us to sharpen our focus on the core go forward bank.”

RBS shares fell about 6% to around 236p, giving it a stock market value of roughly £29 billion.

RBS reported an operating loss before tax of £4.08 billion for 2016, compared with an operating loss of £2.7 billion in 2015.

McEwan added: “We made good progress throughout 2016 against our strategy.

“Our core business generated £4.2 billion in adjusted pre-tax operating profit for the year – that’s an average of £1 billion per quarter for the last eight quarters.

“We were the fastest growing large bank in the UK last year, with £24 billion of new lending into the UK economy supporting over a million businesses and home owners.

“This bank has great potential.

“We believe that by going further on cost reduction and faster on digital transformation we will deliver a simpler, safer and even more customer-focused bank.”

Ian Gordon, analyst at Investec Bank, wrote in a note to clients: “There is, we think, a perfectly respectable ‘underlying’ business performance buried under all this …

“But we do not expect it to start to emerge before 2018, nor translate into anything akin to ‘normal’ profitability before 2020.”