Royal Bank of Scotland posts first-half loss, sees no early upturn

The Royal Bank of Scotland posted a wider first-half net loss on Friday, even as it pronounced a bleak forecast for the next two years, sending its stock plummeting.

RBS, in which the government now holds a 70.3 per cent stake, reported a net loss of 1.04 billion pounds in the first half, compared with a loss of 827 million pounds a year ago.

Sluggish trading in its retail and corporate businesses wiped out strong gains in its investment banking unit. The bank also reported a 7.5 billion pounds hit from bad debts.

Revenue rose 58 percent to 21.84 billion pounds, from 13.84 billion pounds a year ago, as the bank also made progress on a sweeping restructure of the business implemented after it was bailed out by the government in October.

Chief executive Stephen Hester said that first-half results were "poor," but added that analysed alongside the bank's new strategy "they highlight well our core business potential, the hard work of our people in difficult times and the vulnerabilities and economic headwinds we grapple with."
RBS, Britain's biggest bank in balance sheet terms, also earned the dubious honour of posting the largest annual loss in British corporate history on Thursday - a 24.1 billion pound black hole fed by the bank's aggressive acquisition spree of recent years.

Hester warned that results over the next two years would be "poor", as provisions against bad loans were set to increase in the coming months. He admitted the bank would probably have to call on taxpayers for yet more cash through the government's asset guarantee scheme.