Massive asset writedowns of $11.4 billion caused the loss - which stands in stark contrast to the net income of $7 billion enjoyed by the bank in January-June 2007.
The loss is also the bank's first in 40 years of trading as a public company.
RBS has been one of the banks worst-hit by the credit crunch, due in part to its high levels of exposure to the sub-prime mortgage market and financial products linked with property.
The firm's takeover of Dutch lender ABN Amro as part of a consortium just prior to the onset of the credit crisis has also left its balance sheet vulnerable.
Commenting, RBS chief executive Sir Fred Goodwin said: "We recognise that we must now deliver a level of performance that meets their expectations for the company and restores value to our shares.
"We are determined to do so, and this is our focus."
He added that he found the first-half results "unsatisfactory".