RBS confirms biggest loss in UK corporate history

| February 26, 2009 | 0 Comments

Royal Bank of Scotland (RBS), which is 68% owned by the taxpayer, has today reported a full 2008 year loss of £24.1 billion - the largest annual loss in UK corporate history.

The loss was attributed to the “unprecedented turbulence” in financial markets according to the bank’s chairman, Philip Hampton.

Mr Hampton warned that 2009 would be another challenging year but thanked the Government and taxpayers for their support.

According to RBS, the majority of the losses came as the bank made a £16.2 billion write-down on poorly performing assets, primarily as a result of its takeover of ABN Amro, on the eve of the credit crunch. Analysts have been vocal in their opinion that RBS paid too much for the Dutch bank.

In the meantime, RBS is to participate in the Government’s Asset Protection Scheme - full details are in expected in the next couple of days. Commenting on the scheme, newly-appointed chief executive Stephen Hester said “Participation in this scheme would assist us in reducing risk for shareholders whilst providing greater support for UK customers via increased lending“.

Lloyds Banking Group is expected to be involved in a similar arrangement.

Meanwhile, RBS announced earlier this week it was to embark on a major restructure which will see it sell off at least 20% of its business worth around £300 billion.

The bank is also set to withdraw from about half of the 60 countries in which it operates, which includes parts of Eastern Europe and Asia.

However, jobs are expected to be lost with a headcount reduction of between 10% and 20%, according to reports. This is on top of the thousands of positions which have already been eliminated.

Tags: ABN Amro, , Government’s Asset Protection Scheme, , , , ,

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