RBS bouncing back from crisis but still losing money

ROYAL Bank of Scotland said today it has continued to bounce back from the economic crisis but is still losing money.

The bank recorded an overall headline loss of 248m in the first three months of this year, much smaller than the 902m loss in the same period last year.

And the company, which employs 9000 staff in Edinburgh, said that the "most substantial" job losses have been completed but warned that more will come.

The 248m loss includes one-off fees relating to restructuring and its participation in the Government's asset protection scheme.

At an operating level, its pre-tax loss narrowed to 21m in the three months to the end of March, compared to 44m this time last year.

Bosses at the company said that "good progress" has been made but said there is "significant work to be done" for its five-year turnaround plan.

Chief executive Stephen Hester said: "Last year we began implementing one of the most significant corporate restructurings ever undertaken.

"Today we show that we remain on track for the delivery of the plan – we are doing what we said we would do."

He said that the year had begun "broadly as expected" with the signs of economic recovery "benefiting our customers and thereby ourselves".

However, he admitted he remained cautious about the impact of economic turbulence, such as the crisis in Greece.

The firm has already slashed staff across the world, with jobs in the UK and Edinburgh impacted by 2bn of savings

But Mr Hester warned there are more to come. He said: "Over 2bn in annualised cost savings have so far been achieved.

"Regrettably, but inevitably, this has resulted in job losses and there are more to come. The group will continue to work hard alongside staff to minimise the human impact of this."

The bank, which is 83 per cent owned by the taxpayer after it was bailed out by the government, said losses on toxic debts fell 14 per cent from the previous quarter to 2.7bn.

Mr Hester said:

"Progress to date should give encouragement, but there is no complacency within RBS."

Its retail and commercial businesses are said to be "beginning to recover and should drive growth over the next few years". Mr Hester said: "While we have taken decisive management actions, the pace of recovery will also be affected by the rate at which credit conditions change and when interest rates return to more normal levels, giving some relief to liability margins."