RBS posts third-quarter losses
Updated on 06 November 2009
Part-nationalised Royal Bank of Scotland (RBS) has posted third-quarter losses of £1.53 billion despite slim signs of improvement at the beleaguered business.
The operating loss was below second-quarter losses of £3.53 billion. Bad debts remained high at £3.28 billion but around 30% below the April-June period, the bank said.
Chief executive Stephen Hester said he was "upbeat, though realistic" over the "tough job" ahead in restoring the bank's fortunes.
On Tuesday RBS agreed a deal which will see up to £33.5 billion in taxpayer funds pumped into the ailing bank, taking the public stake to 84%.
The bank said bad debts were "plateauing" but Mr Hester warned: "We owe it to everyone to be realistic and transparent."
He said: "Economic recovery is likely to be slow and the pain of economic adjustment will take years to subside. Our business will reflect these issues.
"Profitability in our core businesses will recover fully only when our own actions are also complemented by more normal interest rates and bad debt experience."
The narrowing losses came largely from the non-core parts of the business already earmarked for sale. Operating losses shrank from £4.98 billion to £2.72 billion, although it will take time to work through the bank's remaining credit market exposures.
The NatWest owner added that retail banking profits in the UK, Ireland and the US remained "subdued" with deposit margins under pressure due to record low interest rates.
The bank's cost-cutting programme has also delivered further efficiencies but RBS warned that this would mean more job losses on the way as it adapts to "changed market realities". The company announced another 3,700 job losses this week.
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