RBS reports £1.5 billion loss: Banking group upbeat despite third quarter shortfall

Published on Friday 6 November 2009 09:15

ROYAL Bank of Scotland group lost £1.53 billion during trading in the third quarter of 2009, it was announced today.

• RBS chief executive Stephen Hester is "upbeat" about the bank's future

Chief executive Stephen Hester said he was "upbeat though realistic" about the bank's future fortunes.

Today's figure is an improvement on second quarter losses of 3.53 billion. Bad debts remained high at 3.28 billion but around 30% below the April-June period, the bank said.

The bank said bad debts were "plateauing" but Mr Hester warned: "We owe it to everyone to be realistic and transparent."

He said: "Economic recovery is likely to be slow and the pain of economic adjustment will take years to subside. Our business will reflect these issues.

"Profitability in our core businesses will recover fully only when our own actions are also complemented by more normal interest rates and bad debt experience."

The narrowing losses came largely from the non-core parts of the business already earmarked for sale. Operating losses shrank from 4.98 billion to 2.72 billion, although it will take time to work through the bank's remaining credit market exposures.

The NatWest owner added that retail banking profits in the UK, Ireland and the US remained "subdued" with deposit margins under pressure due to record low interest rates.

The bank's cost-cutting programme has also delivered further efficiencies but RBS warned that this would mean more job losses on the way as it adapts to "changed market realities". The company announced another 3,700 job losses this week.