Updated May 5 at 12:05pm

Sign up to receive Providence Business News' newsletters
and breaking news alerts.  

banking

RBS posts wider-than-estimated loss

Posted:

LONDON - Royal Bank of Scotland Group Plc, Britain’s biggest state-owned lender, reported a wider-than- estimated loss on impairments in Ireland, writing down Greek debt and compensating customers for improperly sold insurance.

The net loss for 2011 was 2 billion pounds ($3.1 billion) compared with 1.1 billion pounds a year earlier, the United Kingdom’s second-largest bank by assets said in a statement Thursday. That was worse than the 1.1 billion-pound median estimate of 11 analysts surveyed by Bloomberg News.

RBS (parent of Providence-based Citizens Bank) took an impairment of 1.1 billion pounds on holdings of Greek government securities and said it “exceeded run-off targets” in its non-core businesses, bringing forward some of its losses. CEO Stephen Hester, 51, who has said his job is equivalent to defusing the “biggest time bomb in history,” has shrunk the bank’s assets by more than 700 billion pounds and cut more than 35,000 jobs since he took over from Fred Goodwin in 2008.

“While there is still work to be done to get RBS into a position where it is generating attractive returns for shareholders, the glide path to normality is increasingly clear,” UBS AG analysts John-Paul Crutchley and Alastair Ryan said in an e-mailed note.

RBS’s loss would have been narrower if it hadn’t taken 850 million pounds in charges relating to compensation for U.K. customers who were improperly sold personal-loan insurance.

Shares rise

The loss at RBS’s Irish unit, Ulster Bank Ltd., increased to 1.02 billion pounds in 2011 from 760 million pounds in the previous year on impaired mortgages. RBS has injected as much as 10 billion pounds into its Irish unit since 2008.

The lender reduced its medium-term target for return on equity to 12 percent from 15 percent.

“We have three jobs at RBS - to support our customers, to defuse our legacy risks and rebuild a successful, profitable bank,” Hester said in the statement. “In 2011 we showed results across all three goals, though with much still to do.”

royal bank of scotland, rbs, citizens bank, impairments in ireland, write downs of greek debt, improperly sold incurance, stephen hester, fred goodwin, ulster bank, u.k. rescue, banker compensation
Next Page

Comments

No comments on this story | Please log in to comment by clicking here
Please log in or register to add your comment
Latest News