Royal Bank of Scotland’s gross new mortgage lending rose 29 per cent in 2015 to £23bn.
Net mortgage balances rose £9.3bn, or 10 per cent, to £104.8bn in 2015.
RBS UK’s wider personal & business banking arm, which includes Ulster Bank Northern Ireland, made an operating profit of £1bn in 2015, down 9 per cent from 2014.
RBS says the loss was “caused by lower non-interest income combined with increased restructuring costs and litigation and conduct costs”.
The banking group says this was partially offset by a small net impairment release.
Total income for the division was £5.2bn, a 4 per cent drop from £5.4bn in 2014.
The banking group says that net interest income fell 2 per cent to £4.15bn, mainly due to pressure on mortgage margins as customers move to lower margin fixed rate products.
RBS says “higher internal funding costs” are also a factor in the net interest income drop.
Royal Bank of Scotland reported an overall £2bn loss in 2015 amid restructuring charges and costs linked to conduct failures.
However, losses were lower than in 2014 when the taxpayer-backed bank hemorrhaged £3.47bn.
Litigation costs included £600m more in provisions for the payment protection insurance misselling scandal, while restructuring costs came in at £2.9bn.
When these costs are stripped out, the bank delivered operating profit of £4.4bn versus £6bn in 2014.
RBS says: “The group is subject to a number of legal, regulatory and governmental actions and investigations. Unfavourable outcomes in such actions and investigations could have a material adverse effect on the group’s operations, operating results, reputation, financial position and future prospects.”
It adds: “In the past eight years, the group has dramatically downsized and simplified the scale and complexity of its operations as compared to its operations preceding and during the financial crisis.
“However, the group’s operations remain diverse and complex, and the group operates in legal and regulatory environments that expose it to potentially significant litigation, civil and criminal regulatory and governmental investigations and other regulatory risk.”
Reconstruction costs will remain high in 2016 and are expected to reach £1bn during the year.
Despite these losses RBS chief executive Ross McEwan has been awarded more than double his pay of 2014, when he took home £1.8m. His total pay, including bonus and benefits package, comes in at £3.8m for the year. Part of this increase is due to a long-term incentives plan from 2013 paying out.
Included in McEwan’s salary is £1m in pay, £1m in a fixed share allowance, £350,000 in pension, plus £1.3m in a long-term incentive award.