RBS posts £2.2bn third-quarter pre-tax loss
by Gill Montia
Story link: RBS posts £2.2bn third-quarter pre-tax loss
Royal Bank of Scotland (RBS) has announced that it made a pre-tax loss of £2.2 billion in the three months to the end of September; the result compares with a profit of £1.9 billion in the same period last year.
The group’s impairment charges remained high, at £3.3 billion for the third quarter, with impairments and credit market writedowns concentrated in its Non-Core division.
However, writedowns are still rising at its Ulster Bank and RBS Citizens lending unit, in the US.
The bank has achieved £45.5 billion of new lending to UK companies so far in 2009, reflecting a 5% third-quarter increase in lending to small and medium sized enterprises, compared with the second quarter.
The group’s Core Tier 1 capital ratio declined to 5.5% at the end of September but plans agreed with the Government and participation in the Asset Protection Scheme will take the ratio to “well above” its 8% target.
The same plans will see the taxpayers’ stake in the business increase from around 70% to 84%.
The lender described the third quarter as showing “a number of encouraging trends” but says it remains cautious about economic prospects “as the recovery seems likely to be slow and unemployment continues to rise”.
In other RBS new, the group is about to embark on a programme of disposals that will satisfy EU competition rules, given the extent of its state support.
The banks looks set to sell 318 branches across the UK, including its NatWest brand in Scotland.
The group’s Direct Line and Churchill insurance businesses, Global Merchant Services, RBS Sempra Commodities and card payment units are also expected to be auctioned off.
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