PROVIDENCE – Citizens Financial Group Inc.’s largest division lost $600 million in 2009 as it charged off more than $2 billion in bad loans and set aside more money for future defaults.

RBS Citizens N.A., Rhode Island’s largest bank by deposits, wrote off $2.17 billion in loans it deemed uncollectible last year, nearly double the $1.16 billion it wrote off in 2008, according to filings with the Federal Deposit Insurance Corporation.

At the same time, the division nearly doubled its loan-loss provision – money set aside to cover potential bad loans – to $2.48 billion, up from $1.69 billion at the close of 2008.

RBS Citizens is the holding company for most Citizens Bank and Charter One banks, including Citizens’ operations in Rhode Island and Massachusetts. It is one of Citizens Financial Group’s two bank subsidiaries, the other being Citizens Bank of Pennsylvania.

RBS Citizens’ net loss of $600.4 million for 2009 was an improvement compared with the prior year, when the bank lost $760.71 million, partly due to a one-time goodwill impairment charge of $1.25 billion.

Although RBS Citizens avoided impairment charges in 2009, the division was hurt by a decline in revenue.

RBS Citizens posted $6.17 billion in interest and non-interest revenue last year, down 20 percent from $7.72 billion in 2008. The company’s income from interest and loan fees shrank more than 30 percent.

Citizens Financial Group is owned by the British financial giant Royal Bank of Scotland Group Plc, which has been badly damaged by the financial crisis and is now 84-percent owned by the U.K. government.

Additional information is available at citizensbank.com.