The figure compares with a profit of £940 million in the same period last year, when the bank’s balance sheet was boosted by the sale of US bank Citizens.
RBS was stung by £425 million in conduct and litigation charges, largely linked to the sale of mortgage-backed securities in the US, and £469 million in restructuring costs.
The lender, which is still 73% owned by the Government, said that despite “positive discussions” with interested parties on the sale of Williams & Glyn, it will miss its 2017 deadline.
RBS must offload the Williams & Glyn branches by the end of next year as part of EU conditions linked to its £45 billion bailout at the height of the financial crisis.
The bank said: “RBS is therefore in discussion with HM Treasury, and expects further engagement with the European Commission, to agree a solution with regards to its state aid obligations.”
However, the lender is thought to be in discussions with a number of interested parties, including the owner of Clydesdale and Yorkshire banks, CYBG.
Stripping out restructuring and litigation costs, operating profit came in at £1.3 billion for the period, up from £826 million.
Chief executive Ross McEwan said: “We’ve said that 2015 and 2016 would be noisy as we work through legacy issues and transform this bank for customers. These results reflect that noise.
“Our core business results were good, with a £1.3 billion adjusted operating profit - our best quarter since 2014.
“The core business has now delivered on average over £1 billion in adjusted operating profit for the last seven quarters.”
On Brexit, Mr McEwan added: “The economy is holding up, but there is uncertainty. We saw a fall in mortgage applications but that’s now back to normal. Time will tell.”
The Edinburgh-based bank is also grappling with legal claims surrounding its 2008 rights issue.
On Thursday the RBoS Shareholder Action Group said it will continue its £1.25 billion compensation claim despite reports that the lender is looking to settle some outstanding cases.
RBS chief financial officer Ewen Stevenson said alongside the bank’s results: “We are exploring settlement options, but if that fails then we’ll be in court in 2017.”
Investors reacted positively to the results, with shares 5% up in early trading.