RBS reports £15m profit but bad debts soar
by Kay Murchie
Story link: RBS reports £15m profit but bad debts soar
The Royal Bank of Scotland (RBS), which is the last bank to publish figures this week, has reported a pre-tax profit of £15 million for the first half of 2009.
However, the bank also said it had written off £7.5 billion of bad debts during the period.
The bank is 70% owned by the taxpayer after the Government was forced to take a stake worth £20 billion in RBS last autumn to prevent its collapse.
Meanwhile, the vast majority of RBS’ profit came from its investment banking business, while its global banking and markets division ended the half-year period £4.9 billion in the black.
Commenting on today’s results, the bank’s chief executive, Stephen Hester, said: “It has been a momentous six months for the business” but added: “There will be no miracle cures. Our task is no less than one of the largest bank restructurings ever done, in the face of strong economic headwinds.”
“Overall results may not substantially improve until 2011 and full recovery will take time,” he added.
Earlier this year, RBS announced a full 2008 year loss of £24.1 billion - the largest annual loss in UK corporate history. Since its bailout last autumn, the bank has axed 15,000 jobs.
Mr Hester, who is the former chief operating officer of Abbey National and chief executive of British Land, took over as chief executive following the departure of Sir Fred Goodwin late last year.
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