RBS reports three-month 'improved' losses of £1.53bn

Published on Friday 6 November 2009 10:07

ROYAL Bank of Scotland today announced losses of £1.53 billion over the past three months, despite slim signs of improvement at the beleaguered Edinburgh-based business.

Chief executive Stephen Hester said he was "upbeat, though realistic" over the "tough job" ahead in restoring the bank's fortunes.

The operating loss was below the losses of 3.53bn for the previous quarter. Bad debts remained high at 3.28bn, but about 30 per cent below the April-June period, the bank said.

The part-nationalised bank's core business recorded an operating profit of 1.193bn.

On Tuesday, RBS agreed a deal which will see up to 33.5bn in taxpayer funds pumped into the ailing bank, taking the public stake to 84 per cent

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."

The narrowing losses came largely from the non-core parts of the business already earmarked for sale.

The bank said 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.

The bank lent 15.2bn to businesses under loan commitments during the third quarter, although demand for lending is "muted" and customers still have access to 27bn in undrawn facilities.