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Royal Bank of Scotland reports annual loss of £1.13bn | Royal Bank of Scotland reports annual loss of £1.13bn |
(40 minutes later) | |
Royal Bank of Scotland (RBS) has reported a loss of £1.13bn for the full-year 2010, a bigger loss than analysts had been expecting. | |
However, this is an improvement on the £3.6bn loss the bank made in 2009, and the £24.3bn loss it made in 2008. | However, this is an improvement on the £3.6bn loss the bank made in 2009, and the £24.3bn loss it made in 2008. |
Money put aside for bad loans fell by 33% compared with a year earlier, to £9.3bn. | |
The government still owns an 84% stake in RBS after bailing the bank out during the financial crisis of 2008. | The government still owns an 84% stake in RBS after bailing the bank out during the financial crisis of 2008. |
Last week, Barclays bank reported profits of £6.1bn for 2010. | Last week, Barclays bank reported profits of £6.1bn for 2010. |
'Step change' | 'Step change' |
The majority of the loss incurred in 2010 was due to an exceptional charge of £1.1bn related to the government's Asset Protection Scheme, designed to insure banks against losses from bad loans. | |
For the final three months of 2010, RBS made a profit of £12m, compared with a loss of £765m in the final quarter of 2009. | For the final three months of 2010, RBS made a profit of £12m, compared with a loss of £765m in the final quarter of 2009. |
It lent £52bn to businesses between March 2010 and February 2011, "well ahead" of its full-year target of £50bn, the bank said. | |
Over the same 11-month period, it lent £15bn to mortgage customers compared with a full-year target of £8bn. | |
The bank described 2010 as a "step change in our financial performance". | The bank described 2010 as a "step change in our financial performance". |
"The return to operating profit reflects both the internal rebuilding process at RBS and the external recovery in market and economic conditions," said chairman Philip Hampton. | "The return to operating profit reflects both the internal rebuilding process at RBS and the external recovery in market and economic conditions," said chairman Philip Hampton. |
"We are still a good way from where we want to be in terms of our performance but 2010 represents another big stride towards that goal." | "We are still a good way from where we want to be in terms of our performance but 2010 represents another big stride towards that goal." |
Earlier this month, RBS said it would pay its investment bankers bonuses of about £950m for 2010 - down from £1.3bn the previous year. | Earlier this month, RBS said it would pay its investment bankers bonuses of about £950m for 2010 - down from £1.3bn the previous year. |
Chief executive Stephen Hester will receive a £2.04m bonus - all in shares - with his salary frozen at the 2008 level of £1.2m. | Chief executive Stephen Hester will receive a £2.04m bonus - all in shares - with his salary frozen at the 2008 level of £1.2m. |
Last year, Mr Hester declined to take his bonus of £1.6m. | Last year, Mr Hester declined to take his bonus of £1.6m. |
Bank report | Bank report |
RBS bought Dutch bank ABN Amro before the credit crunch in 2007, but the deal was a disaster and was a major factor in forcing the government to bail out the bank to the tune of £45bn. | RBS bought Dutch bank ABN Amro before the credit crunch in 2007, but the deal was a disaster and was a major factor in forcing the government to bail out the bank to the tune of £45bn. |
The government paid an average of 50.2 pence for each of the 90.6 billion RBS shares it bought to save the bank from collapse. | The government paid an average of 50.2 pence for each of the 90.6 billion RBS shares it bought to save the bank from collapse. |
RBS shares closed at 47.3p on Wednesday. | RBS shares closed at 47.3p on Wednesday. |
The government has said it will sell its stake in RBS, but is unlikely to do so until the Independent Commission on Banking reports its findings. | The government has said it will sell its stake in RBS, but is unlikely to do so until the Independent Commission on Banking reports its findings. |
The head of the commission, Sir John Vickers, will give an update on his findings next month before publishing the final report in September. | The head of the commission, Sir John Vickers, will give an update on his findings next month before publishing the final report in September. |