Royal Bank of Scotland Reports Huge Losses

Mon, 11 Aug 2008

Reports show that the Royal Bank of Scotland (RBS) experienced a pre-tax loss of approximately £692 million in the first six months of 2008, upon writing down the £5.9 billion on investments affected by the credit crunch . This is clearly one of the greatest losses exerienced in UK corporate history, in stark contrast with the £5.1 billion a year ago. This is the first time the RBS has ever been in the red over its 40 year history of being listed.

RBS's underlying profit, which removes one-offs like the writedowns, was £5.1 billion, a decrease of 3%.

The bank's CEO, Fred Goodwin, asserted that these results highlight progress in key areas. However, these results he added are all the more unsatisfactory, because they record a loss due to RSB credit market writedowns.

He stated that the RSB is keen to ensure that the strengths of the group's diverse business model do not become obscured.

The turbulence experienced in financial markets has given rise to sombre times. RSB shares went up 1.6% to 236.75p in early trading.

The RBS had warned the market of the size of its writedowns with the announcement of its £12 billion rights issue in early 2008.

This writedown of £5.9 billion could have been worse, if a £812 million improvement in its debt value had not been initiated, to offset charges.
add to favouritesnewsletterlink to this pagesend to friendpost comments

Link to this page



 

Business Newsletter

Please enter your email below and subscribe to our monthly newsletter

Reduce mortgage paymentsSave on Your Mortgage

Would you like to save money on your mortgage? Fill out our quick mortgage enquiry form.

Health InsuranceProtect Your Health

Find Critical illness, Life and Private Medical Insurance PMI policies.