Insurance group RSA has fallen into the red after counting the cost of accounting irregularities in Ireland and announced plans for a £775 million rights issue to strengthen its balance sheet.
The More Than parent, headed by former Royal Bank of Scotland boss Stephen Hester, posted a pre-tax loss of £244 million for 2013, compared with the previous year’s profit of £448m.
The extent of the losses means RSA is scrapping its final dividend, and Hester admitted that any payout made at the half-year stage in 2014 was likely to be “modest”.
He said the group had “reluctantly” decided that a rights issue was the best option for bolstering its finances.
Hester added: “RSA’s 2013 results are poor and we need to grasp the nettles of both underperformance and undercapitalisation. As part of this we intend to launch a rights issue to help ensure we have the appropriate level of capital behind the group.”