RBS posts 466 million pounds in losses in Q2

LONDON (AP) ? Royal Bank of Scotland on Friday reported a net loss of 466 million pounds ($723 million) for the second quarter as it set aside 310 million pounds to cover the costs of a computer crash and compensation for mis-selling products to customers.

RBS, which is 82 percent owned by British taxpayers, said it had made a 125 million pounds provision to pay the costs of a computer breakdown which caused havoc with customer accounts in June. It also set aside 50 million pounds for compensating loan customers who were mis-sold complex interest rate swaps. It also made an additional provision of 135 million pounds to compensate customers who bought payment protection insurance which they didn't need, raising the total provision for insurance mis-selling to 1.3 billion pounds.

The loss for the three months ending June 30 was down from a loss of 897 million pounds a year earlier. Operating profit fell 22 percent to 650 million pounds, and revenue fell 5.4 percent to 6.4 billion pounds.

"Overall, the usual complicated set of results with many moving parts, which demonstrated good progress on balance sheet recovery but continued issues around profitability," said Gary Greenwood, analyst at Shore Capital. He said first-half results were broadly in line with forecasts, though costs were higher than expected.

For the first half, the net loss rose from 1.4 billion pounds a year ago to 2 billion pounds.

RBS said it had dismissed a number of employees for misconduct as a result of investigations into the fixing of the London interbank offered rate (LIBOR), a key market index.

Chief Executive Stephen Hester said the issue remains under investigation. So far, only Barclays has been fined for its part in the scandal.

Hester again apologized for the computer problems which struck on June 16. Many customers complained that their deposits had not been posted promptly, leaving their accounts unable to pay bills. Hester has said he would not accept a bonus for this year because of the issue.

The worst problems were in RBS' Ulster Bank subsidiary in Northern Ireland, where Hester said problems with customer accounts had "now been largely rectified."

Source: http://news.yahoo.com/rbs-posts-466-million-pounds-losses-q2-070228355--finance.html

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