RBS, the Royal Bank of Scotland Group Plc., the biggest lender owned by the state of Britain, reported bigger than expected loss on damages in Ireland, writing off Greek’s debt and compensating consumers for unrightfully sold insurance.
Net loss for last year was 2 billion pounds, which is the same as $3.1 billion, as compared to the 1.1 billion pounds it generated a year before, in 2010. The second biggest bank of United Kingdom in terms of assets, reported the loss in a statement released today. The reported loss by the company was more than the estimate of analysts, which were surveyed by Bloomberg. 11 analysts had casted their opinion and the median average that came out for RBS of their estimate was 1.1 billion pound.
Royal Bank of Scotland took over a big debt impairment totaling to about 1.1 billion pounds to write off securities of the indebted Greek nation. It said that it went above run off targets in the bank’s non core business, as it brought forward some of its losses. Stephen Hester, the chief executive officer of RBS, has already shrunk the bank’s asset, bringing them down by nearly 700 billion pounds and also cut 35,000 job opportunities to reduce costs. Stephen took over Fred Goodwin back in 2008 and the CEO has said that his job is just as defusing the “biggest time bomb in history”.
RBS’s reported losses would have been lesser if it did not take 850 million pounds as charges related to compensation for United Kingdom customers who were sold personal loan insurance improperly. Moreover, Ulster Bank Ltd, Royal Bank of Scotland’s Irish unit, also reported increased losses, going from 760 million pounds in 2010 to 1.02 billion pounds in 2011 because of impaired mortgages.
