RBS struggles with write-off to post massive loss

By MoneyhighStreet Staff. Published on August 8, 2008 This post currently has no comments.

The Royal Bank of Scotland (RBS) has revealed that it made a pre-tax loss of nearly £700 million in the first half of the year.

The lender revealed total pre-tax losses of £691 million - the second biggest loss in UK banking history.

This was down from a profit of £5 billion during the same period last year.

According to RBS - which also owns NatWest - the losses were down to write-downs totalling £5.9 billion as a direct result of the credit crunch in the UK and US.

Group chief executive Sir Fred Goodwin commented: "The first half of 2008 has been as difficult an operating environment as we have encountered for some time, presenting both general and specific challenges to RBS.

"It has been a chastening experience and reporting a pre-tax loss of £691 million is something I and my colleagues regret very much."

Despite the significant losses, the lender actually performed better than was expected. The BBC reported that some experts had been predicting that RBS would post losses of between £1.2 billion and £1.7 billion.

The news comes after another UK lender, Barclays, posted its interim results yesterday (August 7th). Despite slipping 33 per cent, the bank still reported pre-tax profits of £2.75 billion.