Leader: Little end in sight to the uphill struggle at RBS

HOW much more misfortune can befall Royal Bank of Scotland? It has taken a hit of £733 million on its holding of Greek government bonds.

It has had to set aside 850m for Payment Protection Insurance claims. It has written down its Ulster Bank loan book by 1.25 billion. Thus, having crawled 1.2bn back into the black in the first six months of last year, RBS is now back in the red at the pre-tax level with a loss of 794m (1.4bn after tax).

Despite this horrendous convergence of misfortunes, chief executive Stephen Hester still felt able yesterday to describe the bank's underlying re-structuring as "going well". The problem here is that RBS is so continuously besieged by one-off exceptional and extraordinary items that it is questionable whether there is any meaningful entity as underlying profit at all, still less whether "real" progress is being made.

Here is one measure of RBS's progress. In October 2008, when Mr Hester became chief executive, the shares stood at 65.7p. A year ago they were changing hands at 52p. Ahead of the results yesterday they opened at 30.2p. They plunged another 15 per cent on the figures before rallying last night to close at a new 12-month low of 28.3p for a fall of "only" 6.9 per cent. These wild gyrations have, of course, been experienced by other banks, and speak to the epochal change in circumstances in which the sector finds itself. Faced with deep concerns over the credibility of sovereign debt across the eurozone, with two member countries already the subject of bail-outs, five under the hammer of austerity economies and economies here and in America battling with the prospect of recession relapse, the term "underlying" does struggle for meaning. Investors might also struggle with the term "due diligence" after inheriting through ABN Amro such a colossal exposure to Greek government debt as to occasion a 733m write-off.

Overall, total RBS revenue has fallen and investment bank earnings have been hit. The bank is pruning another 2,000 jobs, taking the total headcount reduction to 27,500 since the onset of the financial crisis.

Amid this gloom there are flickers of light: core operating profit is up and RBS has exceeded its targets for business lending under the Project Merlin agreement. It has lent 44.2bn to business customers, of which 15.5bn went to small and medium-sized companies.

However, when banks, being critical conduits for growth across the economy, suffer like this, it does not augur well for anyone. Recovery is in everyone's interest, but it is going to take much longer than most envisaged. As for taxpayer repayment, that has now been pushed well over the horizon.

The shares would have to reach 49.9p just to achieve break-even - and there is little prospect of this given an appalling environment that makes this, never mind growth, an epic struggle.