Operating profits were £3.46bn in 2012, up from £1.82bn the previous year – the highest since its bail-out in 2008.
Most of the pre-tax loss came from a £4.6bn accounting charge for changes in the value of its own credit, reports The Telegraph.
The bank also confirmed it was pressing ahead with a partial flotation of Citizens, its US division.
Chairman Sir Philip Hampton said the part-nationalised bank had moved closer to being in a position for the government to start selling its 82pc stake in the bank.
“It is much closer now to being in the good financial health that would allow shareholders to receive a dividend and the government to start to sell its stake,” he said a statement.
RBS took a further £450m charge in the fourth quarter to cover Payment Protection Insurance (PPI) claims, taking provisions for mis-selling of the policies to £2.2bn.
It also set aside £650m to address claims for by small business for mis-sold interest rate hedging products and has agreed to pay UK and US regulators £381m relating to its role in the rigging of Libor, a key interest rate.
