ROYAL Bank of Scotland (RBS) announced a £153 million loss yesterday as millions of pounds has been set aside to cover customer compensation payments and legal settlements.

RBS has earmarked £1.3 billion for potential lawsuits and customer repayments and a further £459m has been reserved for misconduct and litigation costs.

The bank has already paid out £400m in fines to US and British regulators over the foreign exchange scandal, and was also one of six banks fined a total of around £3bn for failing to stop traders manipulating currency markets last year.

An ongoing restructuring operation, which includes thousands of job losses, is expected to cost the bank £1.5bn, further dragging down its financial figures.

RBS chief executive Ross McEwan issued a word of warning, saying that it would “continue to be a noisy year as we continue to go further and faster on restructuring and continue to deal with conduct issues of the past.”

However, RBS’s net profit rose to £293m in the second quarter, prompting praise from chairman Sir Philip Hampton.

Investment Group analysts commented that it would be a while before the bank returns money to its shareholders, but that it was “moving in the right direction.”

Chief financial officer Ewen Stevenson said that he expected the bank to start paying dividends to investors in the first quarter of 2017.

The news from RBS follows Chancellor George Osborne’s recent announcement of plans to sell government shares in the bank at the end of this year.

The government is currently the biggest shareholder in RBS after bailing it out to the tune of £46bn during the financial crisis.

The first sales of shares could take place as soon as September.