The deficit is more than treble 2015’s loss of £2bn. It is the ninth year in a row RBS has failed to make a profit, the BBC reports.
The loss came as the bank set aside more money to deal with legal action in the US and its abandoned attempt to spin off its Williams & Glyn business.
RBS plans to cut costs by £2bn over the next four years, which will mean job cuts and further branch closures.
Chief executive Ross McEwan told the BBC the cost cuts were “huge, and unfortunately there will be job losses amongst that”.
“Branches have been closing and will continue to close. The shape of a branch is changing, and what people do in a branch is changing,” he added.
The bank – which is 72 per cent-government owned – has racked up more than £50bn of losses since the £45.5bn taxpayer bailout during the financial crisis.
In the bank’s results statement, Mr McEwan said: “The bottom-line loss we have reported today is, of course, disappointing but, given the scale of the legacy issues we worked through in 2016, it should not come as a surprise.
“These costs are a stark reminder of what happens to a bank when things go wrong and you lose focus on the customer, as this bank did before the financial crisis.”
A big chunk of RBS’s loss in 2016 – which was more than triple the previous year’s loss of £2bn – was down to it setting aside £5.9bn for fines and legal costs.
The US Department of Justice is pursuing the bank over the sale of mortgage-backed securities prior to the 2008 financial crisis.
RBS has also had to cover legal costs associated with payment protection insurance (PPI) mis-selling.
However, Mr McEwan said he expected RBS to return to profit by the end of 2018, and pointed out that when one-off charges were stripped out, the core business of the bank was making money.
“We made good progress throughout 2016 against our strategy. Our core business generated £4.2bn in adjusted pre-tax operating profit for the year,” he said.
“This bank has great potential. We believe that by going further on cost reduction and faster on digital transformation we will deliver a simpler, safer and even more customer-focused bank.”
To get the bank into profitability, Mr McEwan told the BBC that the bank needed to resolve its US legal issues and the question of its Williams & Glyn unit, which lends to small and medium-sized businesses.
The European Union ordered RBS to sell the unit by the end of 2017 to address competition concerns, but last year RBS failed to sell the business to Santander and talks with Clydesdale Bank failed.
Instead, RBS and the government have suggested the bank gives £750m – which the bank has set aside – towards initiatives designed to boost competition in UK business banking.