£700m Loss Announced by RBS

RBS has announced its first loss in 40 years as a publicly-listed company.

The bank lost £691 million over the first half of the year before tax, it announced today. While this represents a significant blow to RBS, the actual scale of the loss is far less than some analysts were predicting.
One survey even forecast a £1.2 billion financial hit for the six-month period - which would have been the biggest in UK banking history.

The £5.9 billion of asset markdowns due to the credit crunch already announced by RBS is a key factor behind the loss. The bank's takeover last year of Dutch lender ABN Amro, as part of a consortium, has also caused some financial strain.

Nevertheless, RBS has recently been making moves to repair its battered balance sheet, with a record £24 billion issue of new shares completed earlier this year and plans to sell of the firm's insurance unit ongoing.

Commenting, RBS chief executive Sir Fred Goodwin said: "We recognise that we must now deliver a level of performance that meets their expectations for the company and restores value to our shares. We are determined to do so, and this is our focus…[the results are] unsatisfactory."

RBS is Britain's second-biggest bank.