This has been the fifth annual loss since it was rescued by the government in 2008 trebling last year’s loss of £766m.
The government owns 81% of RBS.
It took £450m charge to cover Payment Protection Insurance (PPI) claims to take provision for mis-selling of policies to £2.2bn.
The bank has confirmed in recent statements that it is selling some of its US division, Citizens, on the stock exchange within the next few years.
In a press call on Thursday chief executive Stephen Hester said it there is “another choppy year ahead” although he did add that “the light at the end of the tunnel is coming much closer”.