Massive £300m hit for RBS reported
Aug 03 2012
Part-nationalised Royal Bank of Scotland (RBS) is to rack up more losses amid reports it will take a £300 million hit following its IT meltdown and its role in two mis-selling scandals.
The bank, which is 82% owned by the Government, will put aside some £125 million for compensating RBS, NatWest and Ulster Bank customers, some of whom were locked out of their accounts for weeks by the IT failure, according to Sky News.
And its bill for mis-selling Payment Protection Insurance will increase by a further £130 million, taking the cost so far to some £1.3 billion, it was reported.
But some analysts think a hit of £200 million is more likely after rival Lloyds took an additional £700 million charge last month. There is also expected to be a relatively small £50 million provision for its part in mis-selling interest rate swaps to small businesses.
The charges for compensating customers are expected to contribute to a widening half-year loss and cap a difficult six months for the bank as it struggles to restore its battered reputation following its £45 billion bailout.
Bank expert Ian Gordon at Investec Securities is forecasting RBS pre-tax losses to widen to £1.35 billion in the six months to June 30, from £794 million a year earlier after an expected 13% drop in income to £12.3 billion.
On an operating basis, RBS figures have been far more positive. Its first quarter figures showed operating profits of £1.1 billion against losses of £144 million last year.
|Page 1 of 2||Next|