LONDON: Britain’s state-rescued Royal Bank of Scotland said Thursday it sank into a first-quarter net loss on vast provisions for restructuring and legacy costs linked to its past conduct.
RBS, about 80-percent owned by the government after a 2008 bailout, said losses after taxation stood at #446 million ($688 million, 619 million Euros) in the three months to the end of March.
That contrasted with a net profit of #1.195 billion in the same period a year earlier, it added in a results statement.
The bank set aside #453 million for restructuring costs, mainly relating to a write-down in the value of its US premises.
And it took 856 million of “litigation and conduct” charges, which related to “foreign exchange and mortgage-backed securities litigation in the United States together with other customer redress.”
That provision included a #334 million charge for foreign exchange investigations and litigation, and another #100 million to compensate customers who were mis-sold payment protection insurance (PPI).
Adjusted operating profit, stripping out the charges and other one-off items, rose 16 percent in the reporting period to #1.63 billion as RBS benefited from “generally benign credit conditions,” cost-cutting and improving ad debts.
Edinburgh-based RBS was rescued with #45.5 billion of public money during the notorious global financial crisis, in the world’s biggest bank bailout.
Back in November, six US and European banks were fined a total of $4.2 billion by regulators for attempting to rig forex markets.
RBS itself was fined #399 million by US and British regulators over the scandal.