Royal Bank of Scotland Records Massive Loss -- Update
August 05 2016 - 3:43AM
Dow Jones News
By Max Colchester
LONDON-- Royal Bank of Scotland Group PLC said its net loss
widened to GBP2.05 billion ($2.68 billion) in the first half of the
year, hit by soaring litigation provisions and more restructuring
costs, and sending the lender's shares down sharply.
The bank said Friday it made revenue of GBP6.1 billion in the
period, down from GBP7.26 billion a year earlier. Its net loss
figure widened from GBP179 million a year earlier, as the bank
crept toward its ninth straight annual loss.
The bottom line was hit by a GBP1.32 billion provision to cover
litigation-and-conduct costs, including an undisclosed amount to
settle a lawsuit over allegations the bank didn't disclose its
financial health ahead of an emergency capital raising in 2008.
RBS shares opened more than 5% lower on Friday.
The bank, which was subsequently bailed out and is now 73%
government owned, also gave up on an expensive project to carve out
and list its Williams & Glyn unit. The unit, which it has to
dispose of by the end of 2017 to meet European state-aid rules,
will instead be sold. Earlier this week, the bank received an offer
from Banco Santander SA's U.K. business to buy the unit, according
to people familiar with the offer.
RBS also took a GBP450 million charge for selling
payment-protection insurance products. Restructuring charges
totaled GBP630 million in the half. Adjusted operating profit,
which strips out provisions and restructuring costs, was GBP2
billion.
Write to Max Colchester at max.colchester@wsj.com
(END) Dow Jones Newswires
August 05, 2016 03:28 ET (07:28 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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