RBS announces further £450 hit

 

Taxpayer-backed Royal Bank of Scotland racked up another £450 million in charges today as it counted the mounting cost of its recent IT meltdown and the PPI mis-selling scandal.

The 80% state-owned bank took an extra £400 million hit in the third quarter to cover the cost of payment protection insurance mis-selling, bringing its total bill to £1.7 billion.

The cost of dealing with the fallout of the computer glitch that locked many RBS, NatWest and Ulster Bank customers out of their accounts also rose by £50 million to £175 million.

The mounting provisions came as the bank, which has 30 million customers worldwide, unveiled a pre-tax loss of £1.3 billion, compared to a £2 billion profit in the same period last year.

The total mis-sold PPI bill for Britain's big four lenders has risen to more than £10 billion, with HSBC forecast to post a more modest provision next week.

Fellow state-backed lender Lloyds Banking Group yesterday set aside another £1 billion to cover PPI claims, bringing the total to £5.3 billion, while Barclays announced an additional £700 million, giving it a total of £2 billion.

The additional £50 million provision for the IT fiasco in June will cover customer redress, RBS said, including interest lost and other compensation costs.

The incident is being investigated by an independent external counsel with the assistance of third party advisers.

Chief executive Stephen Hester said its five-year restructuring plan is now in its later stages and is being worked through successfully.

He added: "We have already made much progress, though clearly not enough, and our reputation will take time to recover from past events which are still being accounted for."

The additional provisions overshadowed underlying progress at the bank.

The group's core businesses - what will become the "new" bank - saw operating profits rise 67% year-on-year in the third quarter to £1.6 billion.

The non-core assets fell by a further £7 billion to £65 billion in the quarter and have been reduced by 75% to date, while its bad-debt losses fell by £159 million from the previous quarter to £1.2 billion.

Staff costs were 5% lower than in the second quarter at £1.9 billion, with headcount down by 9,900 or 7% from a year earlier.

The group cleared two major milestones in the period, floating its insurance arm Direct Line Group in October, raising £911 million from the sale of a 34.7% stake, and it exited from the Government's Asset Protection Scheme.

However, the bank did see an expected branch sale to Santander collapse in the quarter, which it said was "disappointing". It has restarted efforts to sell the business.

PA

Start your day with The Independent, sign up for daily news emails
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Graduate Recruitment Resourcer

£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Business Analyst - Financial Services - City, London

£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...

SThree: Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...

Day In a Page

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

Not even the 'putrid throat' could stop the Ross Poldark swoon-fest'

How a costume drama became a Sunday night staple
Miliband promises no stamp duty for first-time buyers as he pushes Tories on housing

Miliband promises no stamp duty for first-time buyers

Labour leader pushes Tories on housing
Aviation history is littered with grand failures - from the the Bristol Brabazon to Concorde - but what went wrong with the SuperJumbo?

Aviation history is littered with grand failures

But what went wrong with the SuperJumbo?
Fear of Putin, Islamists and immigration is giving rise to a new generation of Soviet-style 'iron curtains' right across Europe

Fortress Europe?

Fear of Putin, Islamists and immigration is giving rise to a new generation of 'iron curtains'
Never mind what you're wearing, it's what you're reclining on

Never mind what you're wearing

It's what you're reclining on that matters
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband

Chuka Umunna: A virus of racism runs through Ukip

The shadow business secretary on the benefits of immigration, humility – and his leader Ed Miliband
Yemen crisis: This exotic war will soon become Europe's problem

Yemen's exotic war will soon affect Europe

Terrorism and boatloads of desperate migrants will be the outcome of the Saudi air campaign, says Patrick Cockburn
Marginal Streets project aims to document voters in the run-up to the General Election

Marginal Streets project documents voters

Independent photographers Joseph Fox and Orlando Gili are uploading two portraits of constituents to their website for each day of the campaign
Game of Thrones: Visit the real-life kingdom of Westeros to see where violent history ends and telly tourism begins

The real-life kingdom of Westeros

Is there something a little uncomfortable about Game of Thrones shooting in Northern Ireland?
How to survive a social-media mauling, by the tough women of Twitter

How to survive a Twitter mauling

Mary Beard, Caroline Criado-Perez, Louise Mensch, Bunny La Roche and Courtney Barrasford reveal how to trounce the trolls
Gallipoli centenary: At dawn, the young remember the young who perished in one of the First World War's bloodiest battles

At dawn, the young remember the young

A century ago, soldiers of the Empire – many no more than boys – spilt on to Gallipoli’s beaches. On this 100th Anzac Day, there are personal, poetic tributes to their sacrifice
Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves

Follow the money as never before

Dissent is slowly building against the billions spent on presidential campaigns – even among politicians themselves, reports Rupert Cornwell
Samuel West interview: The actor and director on austerity, unionisation, and not mentioning his famous parents

Samuel West interview

The actor and director on austerity, unionisation, and not mentioning his famous parents
General Election 2015: Imagine if the leading political parties were fashion labels

Imagine if the leading political parties were fashion labels

Fashion editor, Alexander Fury, on what the leaders' appearances tell us about them
Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

Phumzile Mlambo-Ngcuka: Home can be the unsafest place for women

The architect of the HeForShe movement and head of UN Women on the world's failure to combat domestic violence