Nov 30, 5:40 AM EST

Royal Bank of Scotland plans to cut costs and shed additional risky investments after failing a Bank of England stress test designed to find out whether lenders could survive another financial crisis



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LONDON (AP) -- Royal Bank of Scotland plans to cut costs and shed additional risky investments after failing a Bank of England stress test designed to find out whether lenders could survive another financial crisis.

RBS, which is 73 percent-owned by the government, was the worst performer among seven U.K. banks covered by the annual review, results of which were announced Wednesday. The central bank also found weaknesses at Barclays and Standard Chartered based on their balance sheets at the end of last year, but no further action was ordered because both have announced plans to increase capital to required levels.

The findings came the same day the Bank of England released its annual Financial Stability Report, saying that the outlook for the country's financial system "remains challenging" and depends on an orderly British exit from the European Union.

RBS was bailed out by the government at the height of the global financial crisis in 2008. The bank, which was briefly the largely in the world, has since restructured its business to focus on the U.K. market and has struggled to rebuild.

RBS said Wednesday it had taken steps to improve its finances since the end of last year, including raising 2 billion pounds ($2.5 billion) from investors. As a result of the most recent stress test, it agreed to take further action to cut costs and reduce risky assets.

"We are committed to creating a stronger, simpler and safer bank for our customers and shareholders," Chief Financial Officer Ewen Stevenson said in a statement. "We have taken further important steps in 2016 to enhance our capital strength, but we recognize that we have more to do to restore the bank's stress resilience including resolving outstanding legacy issues."

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