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| RBS reports 1.04bn pounds losses in H1'09 |
| Press Trust of India / London Aug 07, 2009, 14:38 IST |
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The Royal Bank of Scotland(RBS), in which the British government has a majority stake, has posted a loss of 1.04 billion pounds for the first six months of 2009, bogged down by soaring bad debts.
The entity, propped up by nearly 20 billion pounds of taxpayers money, recorded a loss (after minority interests and preference dividends) of 1.04 billion pounds in the first half of this year, RBS said in a statement today.
In the comparable period, the banking group had a loss of 827 million pounds. Currently, the UK government has about 70 per cent stake in the company.
Reflecting the adverse financial climate, RBS' impairment charges in the first six months shot up to 7.5 billion pounds and has warned the same would stay higher "for a while".
About the outlook, RBS Group Chief Executive Stephen Hester said that results may not significantly improve until 2011.
"Overall results may not substantially improve until 2011 and full recovery will take time. Along the way we will still need the government support that gives us time and strength to restructure," Hester noted.
The beleaguered group is in the process of selling off many assets worldwide and is currently in advanced talks with bidders to dispose off its retail and commercial banking business in countries including India.
As part of its efforts to streamline businesses, RBS has shrunk its balance sheet to 1.64 billion pounds from 2.22 billion pounds in 2008.
In the first six months of 2009, the firm had a gain of 3.8 billion pounds from debt exchange during the same period.
"Our first half results, as we had clearly warned, are poor with a net attributable loss of 1,042 million pounds.
"However, they highlight well our core business potential, the hard work of our people in difficult times, the strength of our customer franchises and the vulnerabilities and economic headwinds we grapple with," Hester said.
According to the company, it had a pre-tax profit of 15 million pounds.
"Our core business divisions reported an operating profit of 6.3 billion pounds on revenues up 25 per cent to 17.8 billion pounds.
"This result was driven by a creditable rebound in GBM, our investment banking business, reversing the terrible losses of 2008, though this performance level is likely to weaken substantially in the second half," the statement said.
RBS noted that non-core division incurred an operating loss of 9.6 billion pounds.
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