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RBS losses escalate in third quarter

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by Kay Mitchell

Royal Bank of Scotland (RBS) has today posted a £1.5 billion operating loss for the third quarter – down 60% compared with the second quarter.

The bank, which is now 84% owned by the taxpayers after receiving an additional £33.5 billion in state funding this week, has written off a further £3.3 billion in bad debts and other bad investments, down from the £4.7 billion it wrote off in the previous quarter.

It has been an eventful week for the bank. On Monday, it announced it would axe 3,700 positions among its branch staff. The job losses are in addition to the 10,000 back-office cutbacks revealed in the UK earlier this year.

Since the onset of the financial crisis, RBS has axed 16,000 jobs worldwide, including 10,000 positions in the UK.

It also warned that more redundancies are on the cards as it adapts to “changed market realities”.

Meanwhile, on Tuesday, the Treasury confirmed that as part of an agreement with the European Commission, RBS will sell off a number of its assets, including 318 branches mainly in England and Wales.

It will also sell its insurance division, made up of Churchill, Direct Line and Green Flag.

The bank has received the largest bailout of any bank in the world with a total of £53.5 billion in taxpayers’ funding.

Finally, the bank will participate in the Government’s Asset Protection Scheme (APS) on revised terms. It will have £282 billion of its assets insured by the taxpayer, less than the £325 billion proposed earlier this year.

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News posted: November 6, 2009

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