Sponsored by
RBS blames credit writedowns for historic loss
Royal Bank of Scotland fell to a first-half loss of £691 million, one of the biggest losses in UK corporate history but not as bad as expected, after taking a £5.9 billion writedown on the value of risky assets.
RBS, Britain's second-biggest bank, on Friday said it swung to a loss from a 5.1 billion profit a year ago after being hit by the writedowns on credit products, which were in line with previous guidance but partially offset by an 812 million reduction in the value of the debt it carried.
The bank had been expected to report a 1.2 billion loss, based on the average of five analysts' forecasts.
"It has been a chastening experience and reporting a pre-tax loss of 691 million is something I and my colleagues regret very much," Chief Executive Fred Goodwin said.
He said difficult conditions in financial markets "look set to be compounded by a deteriorating economic outlook".
The bank said bad debts on mortgages and other loans jumped 58 percent in the six months to 1.5 billion.
RBS has had a troubled year and in June it was forced to raise 12 billion in the biggest ever rights issue, to repair a balance sheet stretched by last year's purchase of parts of ABN AMRO and the writedowns.
It said its core tier 1 capital ratio was 5.7 percent at the end of June and will be above 6 percent by the end of the year.
The bank said its disposal plans were on track, and sales already made would contribute 1 billion to capital, but it did not update on the auction of its insurance business.
RBS said its underlying profit fell 3 percent to 5.1 billion pounds.
The bank is trying to sell its insurance arm, which includes Direct Line, Privilege and the motor business Green Flag. The companies have a strong insurance presence in Yorkshire and employ over 3,000 people in Leeds, Sheffield, Doncaster and Pudsey.
Nat West, which is part of RBS, has a large corporate deals team in the region.
Email to a friend
Print this page- Three-inch blanket of snow heading our way today
- Alan Shearer in list of favourites for Leeds and England jobs: Latest odds
- Barnsley’s Keith Hill invokes Fawlty Towers over link with Leeds job
- McCormack feels United search can be narrowed down
- Redfearn throws down gauntlet as queue builds at Elland Road
Looking for...
Featured advertisers
Jobs
Search for a job
Motors
Search for a car
Property
Search for a house
Weather for Yorkshire
Saturday 11 February 2012
Today
Sunny spells
Temperature: -2 C to 0 C
Wind Speed: 8 mph
Wind direction: South
Tomorrow
Cloudy
Temperature: 2 C to 5 C
Wind Speed: 8 mph
Wind direction: North west
