Royal Bank of Scotland boss Ross McEwan insisted the lender was on its way back to health after a "remarkable journey" despite reporting a ninth straight annual loss of £6.96bn.
The state-backed lender remained mired in multi-billion pound costs linked to its record a decade ago when it careered out of control and had to be rescued during the financial crisis.
2016's loss was more than three times the figure of £1.98bn for the year before.
It leaves the bank, which includes NatWest as well as the RBS brand, looking some way from a return to the private sector after its £45bn bail-out.
Mr McEwan said it was aiming to return to profit by 2018 - meaning it will have endured a full decade of losses under majority state ownership - as the impact of "legacy issues" finally began to fade.
He said: "This is a bank that has been on a remarkable journey. We still have further to go.
"But the next three years will not be the same as the past three.
"Legacy issues will take up a decreasing amount of our time and focus."
Instead the bank would focus on customers, costs and efforts to return to profit - which would represent "a significant step towards being able to start repaying UK taxpayers for their support".
Mr McEwan said the bank was moving to the final phase of a three-phase strategy announced in 2014, after completing plans to build up its strength and strip away "unnecessary complexity".
The lender's latest results saw it weighed down by litigation and conduct costs of £5.87bn.
That included a recently-announced additional £3.11bn set aside over US allegations over the mis-selling of mortgage-backed financial products ahead of the financial crisis.
RBS also took a £2.11bn hit for the cost of restructuring, including £750m set aside for a plan to enable it to avoid having to sell off hundreds of branches under the Williams & Glyn brand.
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