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RBS reports £1.5bn loss for first half

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03/08/2012
State-backed lender Royal Bank of Scotland (RBS) said today it had made a loss of £1.5bn in the first half of this year, after taking a near £3bn writedown on the value of its own debt.

RBS, 83%-owned by the UK taxpayer, revealed the pre-tax loss was almost double the £794m loss seen in 2011, after the bank took a huge hit on the valuation of its debt to the tune of £2.97bn.

The full loss attributable to shareholders of £1.99bn, worse than the £1.43bn seen last year.

The bank also saw its income dip, although only marginally, in the face of the eurozone crisis and the global slowdown, from £14.5bn last year to £13.2bn.

Excluding the writedowns, the group said core operating profit had also dipped from £1.97bn to £1.83bn.

The bank is involved in the LIBOR scandal which rocked peer Barclays recently, but today there was little news on the ongoing investigation by regulators.

RBS said: “The LIBOR situation is on our agenda and is a stark reminder of the damage that individual wrongdoing and inadequate systems and controls can have in terms of financial and reputational impact.

“This is the subject of ongoing regulatory investigation but our customers and shareholders should be in no doubt that we are taking it seriously. These issues together are hard to deal with but just as necessary a part of change from the past as the restructuring of our balance sheet.”

RBS customers suffered a series of errors on their accounts recently because of a computer glitch, and the bank said today it had put aside £125m to cover the cost of compensation.

It said: “A charge of £125m has been accrued in Q2 2012 in relation to the costs of this incident, principally covering redress to the group’s customers.”

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