RBS expecting first-ever annual loss

4 November 2008

The Royal Bank of Scotland (RBS) expects to record the first full-year loss in its near-300 year history this year after the battered lender revealed further write-downs and bad debt charges.

In the third quarter of 2008, RBS wrote down £206 million, it said, building on write-downs of £5.9 billion in the first half of the year.

According to Reuters, exposure to counterparty and sovereign risk, which could be linked to the collapse of US investment bank Lehman Brothers as well as the financial meltdown in Iceland, stood at £700 million in September, knocking £1 billion off the bank's income last month.

Overall, RBS said its operating profit for the first nine months of the year was down by eight per cent compared to the same period of 2007, before write-downs are factored in.

The bank's new chief executive, Stephen Hester, told BBC News: "I suspect that people may conclude that profits will be difficult to achieve this year."

Mr Hester replaced Sir Fred Goodwin, who resigned last month following the government's £20 billion bailout of RBS.

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