Arab Today, arab today rbs posts wider net loss as it shrinks balance sheet
Last Updated : GMT 11:30:29
Arab Today, arab today
Arab Today, arab today

RBS posts wider net loss as it shrinks balance sheet

Arab Today, arab today

Arab Today, arab today RBS posts wider net loss as it shrinks balance sheet

London - Arabstoday

Royal Bank of Scotland Group RBS.LN +3.01% PLC said Friday that it posted a wider net loss of £1.52 billion ($2.46 billion) in the first quarter, as the bank was hit by an accounting charge and continued to wrestle with losses in Ireland. The part-government-owned bank posted revenue of £7.13 billion, down from £8.11 billion in the same quarter a year earlier. In the first quarter of 2011, RBS posted a net loss of £528 million. The recent quarter\'s loss was largely due to an accounting charge, as the bank\'s bottom line was hit by an increase on the value of its outstanding debt to £2.46 billion. This reflects the rising value of the bank\'s debt in the market, which theoretically would make it more expensive for RBS to buy back. Excluding this, pretax profit totaled £1.05 billion. RBS was also hit by an operating loss of £310 million at its Ulster bank. Despite the loss, the company hailed the progress it had made in a difficult operating environment as it strives to become a privately owned bank. \"With growth prospects muted in the major economies in which the group operates, and with fragilities persisting in European financial markets, the focus has remained on improving balance sheet strength and a strong liquidity position,\" RBS said. RBS said that the economic challenges would persist but that retail and commercial performance should remain \"resilient.\" During its full-year results in February, CEO Stephen Hester said the bank was targeting return on equity ratio of around 12%, up from the current 11.3%. In recent quarters, RBS has been taking heavy losses as it writes down bad loans and shrinks its way back to health. To this end, it has put several hundred billion pounds of assets into a \"noncore\" division that it wants to run down. On Friday, the bank said it had shrank its noncore business by an additional £11 billion in the quarter and said that the group was on target to wind the business down. RBS became the latest British bank to increase the amount of money it was setting aside to compensate customers who had be missold payment-protection insurance. The bank said it had put aside an extra £125 million to pay claimants, bringing the total amount it provisioned for PPI to £1.2 billion. In an effort to boost profitability, RBS recently unveiled a broad-ranging restructuring plan. The bank said it would shed a further 3,500 jobs over a three-year period as it prunes back large parts of its investment bank. The move was in part a response to pressure from the U.K. government on large banks to separate risky investment banking businesses from retail ones. On Friday, the group said it continued to target the second half of 2012 for the sale of the first tranche in its insurance business Direct Line Group through a public flotation, subject to market conditions. As part of this effort to become a privately owned bank, RBS confirmed Friday that it would start paying dividends on some preference shares and finish reimbursing £163 billion in taxpayer-backed emergency loans that it accessed during the height of the crisis. To pay for the dividend payment, RBS will issue £350 million in shares.

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Arab Today, arab today rbs posts wider net loss as it shrinks balance sheet Arab Today, arab today rbs posts wider net loss as it shrinks balance sheet

 



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