Pension hole nears 3 years' profit at RBS

Published on Monday 8 March 2010 20:24

ROYAL Bank of Scotland's pensions black hole is now proportionately more than double the size of that of any other bank, figures published today show.

It would take RBS two years and nine months of company earnings to pay off its pension scheme deficit, while Lloyds would currently need almost two years, compared with a financial services average of just three months, according to the quarterly Pensafe report by consultant Hymans Robertson. The RBS deficit has actually improved since 30 September, when it would have needed 990 days of its 2008 earnings to fill. A year earlier it would have required just 280 days.

Clive Fortes of Hymans Robertson said RBS's deficit rose as a proportion of the company's value last year when its shares plummeted. "It also faces 153p of unhedged pension liabilities in the pound of its market cap," said Fortes.