RBS posts £44m loss for Q1
Royal Bank of Scotland (RBS) has today reported a pre-tax loss of £44 million for the first quarter of 2009, against a profit of £479 million for the same three month period in 2008.
Meanwhile, the bank wrote off £4.9 billion during the period while post-tax losses totalled £857 million.
At the end of February the bank, which is now majority-owned by the taxpayer, reported a full 2008 year loss of £24.1 billion – the largest annual loss in UK corporate history.
However, the bad news does not stop there after the bank reported last month it was to axe 9,000 jobs, with 4,500 positions to go in the UK.
RBS said the job losses are part of a £2.5 billion cost-cutting programme, scheduled to take place over the next two years.
Returning to today’s announcement, RBS’ chief executive, Stephen Hester, said the bank “remains cautious and will continue to plan and manage our businesses in the full expectation that both 2009 and 2010 will be very tough years for RBS.”
However, the bank did highlight that it had made “good progress” on its strategic plan to get back to “stand-alone strength”.
Furthermore, RBS said an improvement had been noted in some of its divisions, with an increase in retail banking customers.
In the first three months of 2009, an additional 1.6 million current and savings accounts had been opened, while more than half a million new insurance policies were issued.
Meanwhile, RBS, along with Lloyds Banking Group have signed up to the Government’s Asset Protection Scheme, which insures against losses arising from toxic assets. The two banks will insure nearly £600 billion worth of toxic debts as part of the scheme.
Rival Barclays shunned the scheme, citing it would not be in the interest of investors, depositors and clients. Yesterday, Barclays reported a 15% rise in pre-tax profits for the first three months of the year.
The bank posted pre-tax profits £1.37 billion, primarily due to its Barclays Capital investment banking division.
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