Investors punished the Royal Bank of Scotland on Friday for firmly pushing dividend payments into the future as the cost of past conduct issues led it to its eighth consecutive annual loss. Shares in the taxpayer-owned bank plunged 8 percent in London.

The sell-off came as the bank reported a fourth quarter net loss of 2.74 billion pounds ($3.8 billion), down from 5.79 billion pounds from the same period a year earlier, as it continues to make provisions for sins of the past.

The loss was driven by costs relating to litigation over mortgage-backed securities and provisions for selling payment protection insurance to people who didn't need it.

CEO Ross McEwan says the bank is "working through as many of the remaining conduct and restructuring issues as we can."

"This is a tough but important part of our plan and we are determined to get through it as quickly as possible," he said.

For the year, losses narrowed to 1.98 billion pounds from 3.47 billion pounds for 2014.

Once the world's largest bank, RBS was bailed out during the 2008 financial crisis and has been posting annual losses ever since.

Treasury chief George Osborne suspended sale of the government stake in Lloyds Banking Group due to market turmoil. Analysts do not expect any resumption in the sale of government stakes of RBS or Lloyds soon.

Taxpayers own around 9 percent of Lloyds and around 73 percent of RBS.

Laith Khalaf, a senior analyst at Hargreaves Landsown, said the bank had "kicked the prospect of a dividend firmly into the long grass."

"Markets had expected a 2016 payment, but RBS now says this won't happen before it gets itself clear of the worst of the conduct charges for mis-selling mortgage securities in the U.S.; 2017 is now the earliest shareholders can expect a dividend," he said.